Tesla—which never buys ads—is buying ads to promote Elon Musk’s record $52 billion pay deal days before key shareholder vote

The CEO refused, essentially saying, why spend money on advertising when you have a massive fan following and your every word is covered by the press? In Musk, Tesla had a walking, talking billboard that could communicate more effectively what its cars stand for than any campaign.

“Other companies spend money on advertising & manipulating public opinion,” he countered, “Tesla focuses on the product.” 

Now it looks like Musk is no longer as skeptical of marketing after his company revealed on Monday in an SEC filing that Tesla had paid for advertisements and promoted posts—including on the Musk-owned social media network X. But these ads and not aimed at promoting actual Tesla products, even though they could use the help—quarterly vehicle sales dropped year-on-year for the first time since the pandemic.

Instead, these advertisements—which also appeared on Google—benefit Musk first and foremost. They aim to ensure shareholders support Tesla’s move to reincorporate in Texas—and ratify Musk’s record pay package from 2018. 

Thanks

— Elon Musk (@elonmusk) May 14, 2024

The 2018 pay package granted him the option to buy 304 million shares, currently valued at $52 billion in total, for a steep discount at just $23.33 each. That’s more than any company ever rewarded a CEO and easily surpasses any profits Tesla earned over its entire history.

The news is jarring to some since Tesla is known for being miserly when it comes to publicity campaigns. According to figures from ad-tracking firm Vivvix published in March, Musk’s company invested just $6.4 million last year, a veritable drop in the bucket compared the $3.6 billion spent by General Motors. 

The subject of his pay package has been contentious ever since testimony from board members revealed failings in governance so grave and material a Delaware court felt the March 2018 shareholder approval had to be voided entirely.

“This unprecedented decision by a single judge in Delaware threatens the present and future value creation that Tesla is poised to deliver for all of you,” Tesla warned in one of its sponsored and promoted ads. 

No longer undisputed as chief executive

On the one hand, many investors felt Musk deserves every penny after he built an upstart carmaker teetering on bankruptcy into one of the most valuable companies in the world. On the other, the timing could be better, as some Tesla loyalists are beginning to question his leadership.

Two of Musk’s top lieutenants left without explanation, the core car business is on the decline, mass firings appear have confused investors (and some have been reversed) and the stock price has failed to hold onto gains for over three years.

There is also little guarantee that a successful vote won’t be challenged once more in the courts as a form of illegal corporate waste.

It’s done. For the first time in 10 years, I voted against the Tesla Board’s recommendations. On every proposal, in fact. I have lost faith in them. They have allowed Elon to destroy what was once a great company.

My retail vote may not matter much, but my conscience is clear. pic.twitter.com/dqsvYnfhZd

— 🇨🇦 Walker 🇺🇸 (@walkertheonly) May 13, 2024

Musk has already been heavily incentivized, as he remains the single largest stockholder in Tesla with 411 million shares. More than half—roughly 238 million—are already encumbered, however, so he needs to maintain a high price if the CEO doesn’t want banks making margin calls.

With some disgruntled investors posting evidence online that they are voting against the board on Proposal Four, the agenda item for the June 13 shareholder meeting that would approve his pay, it seems Musk doesn’t want to leave his wealth entirely in the hands of fate.

“Protect that same value creation for the future by voting for Proposal Four,” urged one ad.