WEBVTT - Tesla Chair Talks Musk's Pay, Succession Plans, Politics

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news Caroline.

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<v Speaker 2>Tesla's board has made an unprecedented proposal for a compensation

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<v Speaker 2>package for its CEO, Elon Musk. The total ward value

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<v Speaker 2>could be up to one trillion dollars, but it is

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<v Speaker 2>set against mandatory targets that have a high bar. Both

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<v Speaker 2>operational and financial investors' shareholders are going to vote on

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<v Speaker 2>that package in November, but many of those shareholders still

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<v Speaker 2>have questions. To answer the questions, the chair of Tesla's board,

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<v Speaker 2>Robin Denholm, is with us. Thank you, Robin for your time.

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<v Speaker 2>This proposed package was about Tesla's long term goals as

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<v Speaker 2>much as it was about retaining Elon Musk. But why

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<v Speaker 2>is it so crucial to the board's mind that it

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<v Speaker 2>is Elon Musk that is able to get Tesla to

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<v Speaker 2>this future?

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<v Speaker 3>Well, thank you, Ed. I think it is a pivotal

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<v Speaker 3>time at Tesla and also in the world in AI

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<v Speaker 3>and autonomous and the application of AI is its transformative technologies,

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<v Speaker 3>and we believe it. Tesla in big ambitious goals, and

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<v Speaker 3>so Elon put out the master plan for on the

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<v Speaker 3>first of September, very auspicious day. I think in terms

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<v Speaker 3>of putting out the vision for the company for the

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<v Speaker 3>next decade or more, and AI and autonomous is at

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<v Speaker 3>the front and center of that, both in the vehicles

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<v Speaker 3>but also in our Optimus lineup and what we're doing

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<v Speaker 3>from a robotics perspective as well. And so having the

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<v Speaker 3>boards of responsibilities to look at who the CEO is

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<v Speaker 3>for the next period of time, and we believe that

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<v Speaker 3>Elon is the right CEO for Tesla over this transformative

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<v Speaker 3>period of time. And our view is he's a generational leader.

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<v Speaker 3>Aren't any other people out there like Elon who can

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<v Speaker 3>actually lead the company over this next decade or so,

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<v Speaker 3>And so once you decide who the leader should be,

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<v Speaker 3>you need to put in place a compensation package to

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<v Speaker 3>incent and motivate him to actually deliver against the ambitions.

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<v Speaker 2>The motivational piece is interesting in the course of the

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<v Speaker 2>proxy as you read it and negotiation plays out, doesn't

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<v Speaker 2>it seven or eight months, but that there were sticking

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<v Speaker 2>points on both sides. What were they.

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<v Speaker 3>Well, obviously in any discussion around the future of the company,

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<v Speaker 3>but also the future of an individual in terms of

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<v Speaker 3>what motivates them is very important to understand that. And

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<v Speaker 3>from a board perspective, from a special Committee perspective, as

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<v Speaker 3>we've outlined in the proxy, we had a very fullsome process.

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<v Speaker 3>We had more than ten meetings with Elon in terms

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<v Speaker 3>of understanding what were his motivations, what does he want

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<v Speaker 3>to do over this period of time. And having worked

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<v Speaker 3>with him now I've been on the board for eleven

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<v Speaker 3>years and Kathleen Wilson Thompson, now other amazing Special Committee member,

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<v Speaker 3>has also been working with him for the past six

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<v Speaker 3>or seven years as well, And so from our perspective

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<v Speaker 3>seeing him in the boardroom, but also understanding what motivates him,

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<v Speaker 3>it's things that other people can't do. It's what the

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<v Speaker 3>company could do that no other company could do. So

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<v Speaker 3>those types of things are what are in this plan.

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<v Speaker 3>And so, as you said in the outset, it is

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<v Speaker 3>a zero compensation package unless he delivers against pretty ambitious

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<v Speaker 3>goals for the company.

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<v Speaker 1>Ambitious goals that include twenty million vehicles, that include ten

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<v Speaker 1>million FSD that think about a million robots and robotaxes.

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<v Speaker 1>Robin tell us, from your experience with the twenty eighteen

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<v Speaker 1>pay package are in the investi base really wants to

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<v Speaker 1>understand how structurally this is different.

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<v Speaker 3>Yeah, So for us, the framework of the twenty eighteen

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<v Speaker 3>plan worked very very effectively, and so this package, this

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<v Speaker 3>framework that we've put in place for the twenty twenty

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<v Speaker 3>five proposed compensation package, has twelve tranches, twelve market cap goals,

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<v Speaker 3>where the top goal is eight and a half trillion

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<v Speaker 3>dollars and we're just over a trillion dollars today. The

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<v Speaker 3>first milestone on the market cap side is a two

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<v Speaker 3>trillion dollars, so we've got almost double the size of

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<v Speaker 3>the company before any of the market cap goals are

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<v Speaker 3>actually achieved. And then it increases by half a trillion

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<v Speaker 3>up into the last two tranches, where there's a trillion

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<v Speaker 3>dollar jump each time. And then on the operational side,

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<v Speaker 3>to your point, Caroline, they're very ambitious. We're just over

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<v Speaker 3>eight million cars that have been produced and delivered at Tesla.

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<v Speaker 3>The milestone on the vehicle side is twenty million vehicles,

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<v Speaker 3>ten million FSC paid subscription areas. So to me, these

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<v Speaker 3>are ambitious goals, and not to mention what we're what

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<v Speaker 3>we've proposed in terms of the goals around our robotics areas,

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<v Speaker 3>our optimists and bots a million of those and robotaxis

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<v Speaker 3>and so to me, it really brings the master plan

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<v Speaker 3>for to life within this compensation package. Because they're the

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<v Speaker 3>goals that Elon has, it's the goals that the company

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<v Speaker 3>has as well.

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<v Speaker 1>Some had worried that Elon's goals had turned more towards politics,

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<v Speaker 1>and you draw him back from that within the proxy,

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<v Speaker 1>and he's agreed to wind down his political activity. How

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<v Speaker 1>do you define political activity.

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<v Speaker 3>Robin, I think you know, from my perspective, this is

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<v Speaker 3>a package that really motivates Elon. So having him front

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<v Speaker 3>and center at the company and delivering against really ambitious goals,

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<v Speaker 3>to me, is great for him. It's great for the company.

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<v Speaker 3>It's also great for shareholders, and as we've outlined, the

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<v Speaker 3>shareholders in this proposal actually win very extensively with that

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<v Speaker 3>market cap at eight and a half trillion dollars in

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<v Speaker 3>order to achieve this compensation package. To me, that actually

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<v Speaker 3>is one of the things that all shareholders will benefit by.

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<v Speaker 3>And so from a politics perspective, obviously we're in a democracy,

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<v Speaker 3>so everybody gets to voice their points of view. I

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<v Speaker 3>think Elon having served as a special government employee, he

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<v Speaker 3>obviously completed that activity and he is back and front

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<v Speaker 3>and center at the company these days.

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<v Speaker 2>But did those reassurances go as far as to Elon

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<v Speaker 2>Musk agreeing not to specifically participate in any one political

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<v Speaker 2>party another government role extend to whether or not he

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<v Speaker 2>makes donations in a political cycle.

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<v Speaker 3>Yeah, I mean what he does from a personal perspective,

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<v Speaker 3>in terms of his political motivations, etc. Is up to him.

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<v Speaker 3>I mean, clearly from our perspective as a board, we're

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<v Speaker 3>measuring him on results and measuring him on what he

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<v Speaker 3>does as a CEO of Tesla and our viewers. He's

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<v Speaker 3>delivered big time in the past, and you know, we

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<v Speaker 3>look forward to him doing that in the next era.

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<v Speaker 2>Robin, you've just been unequivocal about the future of the

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<v Speaker 2>company and the inclusion of those operational milestones on Optimus

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<v Speaker 2>and Robotaxi. But when the proxy hit many many shareholders

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<v Speaker 2>went straight to the bullet point on the twenty million

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<v Speaker 2>vehicle deliveries. How much was that informed by the board

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<v Speaker 2>wanting Elon Musk to focus on the bread and butter

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<v Speaker 2>business in the near time. But also did you have

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<v Speaker 2>some data that sales specific were being impacted by Musk's

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<v Speaker 2>political activity.

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<v Speaker 3>Yeah, I would say that vehicles are our mainstay of

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<v Speaker 3>our business today, so is the energy business. A lot

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<v Speaker 3>of people forget about this brilliant business that we have

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<v Speaker 3>on the sustainable energy side, and so from our perspective,

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<v Speaker 3>from a board perspective, they are the revenue drivers of

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<v Speaker 3>the company in the near term. But obviously in the

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<v Speaker 3>plan you can see that there are other areas of

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<v Speaker 3>revenue activity and profitability and growth for the company in

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<v Speaker 3>what we're doing with AI as it relates to optimists,

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<v Speaker 3>but also FSD and beyond. And you know, we've put

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<v Speaker 3>pretty ambitious goals out there in terms of the EBITTER

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<v Speaker 3>and so I think, yeah, the profit in terms of

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<v Speaker 3>having four operational goals around product, but also four pretty

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<v Speaker 3>extensive six actually pretty extensive goals around the profitability of

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<v Speaker 3>the company as well. And you can't do that without

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<v Speaker 3>selling fabulous products that customers want.

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<v Speaker 1>Fabulous products that people have to want to buy, and

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<v Speaker 1>sometimes because of the brand of the person who built them.

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<v Speaker 1>I just ask a little bit again, did you think

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<v Speaker 1>sales were hit by his political activity?

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<v Speaker 3>So my view is over the long term, people buy

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<v Speaker 3>things that they really love, and Tesla vehicles things that

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<v Speaker 3>people really love. You know, it doesn't matter who you are.

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<v Speaker 3>The minute you get into a death Tesla and you

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<v Speaker 3>drive that car, you know what that experience is like.

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<v Speaker 3>And so from our perspective, focusing on products that customers love,

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<v Speaker 3>that our consumers are both in the vehicle space and

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<v Speaker 3>in the energy space, really do enjoy using and appreciate

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<v Speaker 3>in terms of not only the technology aspects, but also

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<v Speaker 3>how the vehicle responds, the user interface, those types of things.

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<v Speaker 3>So again, we're a products company. We love building things

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<v Speaker 3>that people love.

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<v Speaker 1>And we can see the future products just behind your

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<v Speaker 1>shoulder as well. With Optimists and Robin. What's been so

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<v Speaker 1>interesting is the push from Elon's side in the ten

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<v Speaker 1>times you met him and the negotiations and indeed on

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<v Speaker 1>X's platform to have more voting control and have more

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<v Speaker 1>ownership of shares. Can you tell us a little bit

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<v Speaker 1>about how you weigh that as a board and as

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<v Speaker 1>the chair.

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<v Speaker 3>Well, clearly Elon's been very public in terms of the

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<v Speaker 3>things that he motivates him and what actually he wants

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<v Speaker 3>over this next period of time. So as a special

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<v Speaker 3>committee as a board, that's actually easy to work with

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<v Speaker 3>because when you're designing a compensation package, you're looking for

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<v Speaker 3>the things that will motivate an individual to do thing

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<v Speaker 3>above and beyond the mainstay, and so clearly voting rights

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<v Speaker 3>important to Elon, particularly in this era as we're developing

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<v Speaker 3>products around artificial intelligence, autonomous those types of things where

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<v Speaker 3>we could use products for good as opposed to any

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<v Speaker 3>nefarious activity with the products, and so he's been very

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<v Speaker 3>clear on that, and so for us as a special committee,

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<v Speaker 3>taking that information and then working through what were the

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<v Speaker 3>right goals in order for him to earn those voting

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<v Speaker 3>rights is really important. And again I'll say again that

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<v Speaker 3>it's a zero plan if he doesn't achieve the goals,

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<v Speaker 3>So each charch is worth a one percent in terms

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<v Speaker 3>of voting rights. They kick in when he actually hits

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<v Speaker 3>the goals, both an operational goal as well as a

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<v Speaker 3>market cap goal, and then the economic benefits are delayed

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<v Speaker 3>beyond that period of time, which is a difference in

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<v Speaker 3>the plan that we structured in twenty eighteen. So bifurcating

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<v Speaker 3>the voting rights versus the economic benefit actually has a

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<v Speaker 3>huge retentive effect, and so from our perspective, that's one

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<v Speaker 3>of the key levers that we used in the plan.

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<v Speaker 2>You're joining us on Bloomberg television and radio around the world.

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<v Speaker 2>This is Bloomberg Tech Live at Tesla in Palo Alto,

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<v Speaker 2>where we're speaking with the chair of Tesla's board, Robin Denholm,

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<v Speaker 2>about the proposed compensation package for Elon Musk that investors

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<v Speaker 2>will vote on in November. In the proxy, again, it's

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<v Speaker 2>very clear if one is to go and read it

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<v Speaker 2>that Elon Musk essentially said to the special Committee that

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<v Speaker 2>my priority is the voting power. But you know, if

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<v Speaker 2>my motivations aren't met, I am interested to go and

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<v Speaker 2>pursue other interests. What was the kind of absolute for

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<v Speaker 2>the board on your side? You know, I'm trying to

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<v Speaker 2>understand both Caroline's question on you know, I think Musk

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<v Speaker 2>wants the voting power so that he can focus on

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<v Speaker 2>this AI future. But in return to hand over that

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<v Speaker 2>voting power, what is it, Robin, that you wanted to ensure?

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<v Speaker 3>Yeah? I think you know, as I said before, Alan's

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<v Speaker 3>a unique individual. He can apply his time, effort and

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<v Speaker 3>energy into different endeavors. He has different endeavors out there.

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<v Speaker 3>Of what the board sought to do through this plan

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<v Speaker 3>is to actually have him focus, you know, an outsized

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<v Speaker 3>proportion of his time, effort and energy on Tesla, because

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<v Speaker 3>when he does that, shareholders win.

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<v Speaker 2>Might I just add that what's kind of missing from

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<v Speaker 2>the proxy. It's not codified. But you are calm, sanguine,

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<v Speaker 2>comfortable with him also being the CEO at another company,

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<v Speaker 2>private company, or having another leadership position across multiple companies.

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<v Speaker 2>That's okay, Yes, it is okay.

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<v Speaker 3>It is how he's delivered in the past. And you know,

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<v Speaker 3>from our perspective, actually having his creative energies in various

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<v Speaker 3>endeavors that are outside of Tesla actually helps Tesla. Yes,

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<v Speaker 3>And now that sounds perverse and people don't really understand that,

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<v Speaker 3>but having worked with him now for eleven years, it

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<v Speaker 3>actually benefits Tesla with him doing things that are not

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<v Speaker 3>in the mission of Tesla outside of Tesla, both from

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<v Speaker 3>a resource perspective but also from a motivation perspective. And

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<v Speaker 3>so I think to really understand that point is to

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<v Speaker 3>understand Elon and how he actually works. And so that's

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<v Speaker 3>what the board sought to do through this plan Succession.

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<v Speaker 2>The latter tronches directly relate to Elon Musk's participation in

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<v Speaker 2>succession planning and the successful implementation of that succession planning.

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<v Speaker 2>You started this conversation by saying, there isn't any like

0:15:00.920 --> 0:15:04.360
<v Speaker 2>Elon Musk given that this is a decade long plan,

0:15:04.480 --> 0:15:07.960
<v Speaker 2>So maybe succession after a decade is more timely than

0:15:08.680 --> 0:15:11.280
<v Speaker 2>do you have confidence as aboard there are leaders already

0:15:11.400 --> 0:15:14.840
<v Speaker 2>within Tesla that could potentially step up when he's gone,

0:15:15.280 --> 0:15:17.920
<v Speaker 2>or are you already starting to speak with Elon Musk

0:15:17.960 --> 0:15:22.360
<v Speaker 2>about external candidates, those that are nearest to him, you know,

0:15:22.400 --> 0:15:25.640
<v Speaker 2>in that level of extraordinary ability that you see in him.

0:15:25.920 --> 0:15:29.840
<v Speaker 3>Yeah. So clearly, succession planning is a very important responsibility

0:15:29.840 --> 0:15:33.960
<v Speaker 3>for the board and we take that responsibility very seriously.

0:15:34.400 --> 0:15:37.320
<v Speaker 3>I meet with investors all the time, and I will

0:15:37.360 --> 0:15:40.400
<v Speaker 3>say it's probably my number one question that I get

0:15:40.920 --> 0:15:47.560
<v Speaker 3>in terms of consistency of feedback from investors around succession planning.

0:15:47.880 --> 0:15:51.960
<v Speaker 3>And so from our perspective, we obviously have a plan

0:15:52.040 --> 0:15:55.040
<v Speaker 3>if something untoward to it to happen in the near term,

0:15:55.320 --> 0:15:58.920
<v Speaker 3>but we also want to have and do have a

0:15:59.040 --> 0:16:04.800
<v Speaker 3>longer term succession plan. Now, this plan, this compensation plan,

0:16:04.960 --> 0:16:07.560
<v Speaker 3>is a ten year plan. Elon will be sixty four

0:16:07.680 --> 0:16:11.000
<v Speaker 3>or close to sixty five by the time this plan completes.

0:16:11.960 --> 0:16:15.560
<v Speaker 3>At some point he will want to ease back. Maybe

0:16:15.560 --> 0:16:17.960
<v Speaker 3>he doesn't believe that today, but at some point he

0:16:18.040 --> 0:16:20.440
<v Speaker 3>may want to do that. And so we want to

0:16:20.480 --> 0:16:23.360
<v Speaker 3>make sure that we have the right leaders in place

0:16:23.480 --> 0:16:26.560
<v Speaker 3>to do an orderly transition at some point in the future.

0:16:26.920 --> 0:16:30.120
<v Speaker 3>And so making that part of this plan was a

0:16:30.240 --> 0:16:34.760
<v Speaker 3>very deliberate activity, and obviously he was part of that

0:16:34.880 --> 0:16:38.000
<v Speaker 3>discussion as well, and he is part of the discussion

0:16:38.040 --> 0:16:41.840
<v Speaker 3>on an ongoing basis that the board has around succession planning,

0:16:42.120 --> 0:16:47.080
<v Speaker 3>the talent that we have. We have extraordinary talent inside

0:16:47.120 --> 0:16:51.360
<v Speaker 3>of Tesla, across many facets of the company, and so

0:16:51.760 --> 0:16:56.080
<v Speaker 3>making sure that we're continuing to develop those leaders but

0:16:56.240 --> 0:17:00.360
<v Speaker 3>also bringing in talent. And you know that's the other part.

0:17:00.720 --> 0:17:05.639
<v Speaker 3>It's in the report as well, and that Elon is

0:17:05.640 --> 0:17:09.320
<v Speaker 3>a talent magnet, particularly on the engineering side, that we

0:17:09.440 --> 0:17:14.480
<v Speaker 3>have extraordinary depth in the AI space, in the engineering space,

0:17:14.560 --> 0:17:18.679
<v Speaker 3>in the manufacturing space, and largely because he works with

0:17:18.720 --> 0:17:22.080
<v Speaker 3>them day in and day out. And so that's one

0:17:22.119 --> 0:17:24.919
<v Speaker 3>of the unique aspects to this and also one of

0:17:24.920 --> 0:17:28.280
<v Speaker 3>the unique aspects to the plan is to make sure

0:17:28.320 --> 0:17:32.840
<v Speaker 3>that we have that visible succession plan as we near

0:17:32.880 --> 0:17:36.560
<v Speaker 3>the end of this decade long compensation packet.

0:17:36.680 --> 0:17:38.880
<v Speaker 1>Robin, what you just said was really interesting, the fact

0:17:38.880 --> 0:17:41.680
<v Speaker 1>that there is a plan in place if something untoward

0:17:41.720 --> 0:17:43.960
<v Speaker 1>would happen. Can you spell out what that would look

0:17:44.040 --> 0:17:45.240
<v Speaker 1>like in the here and now?

0:17:47.840 --> 0:17:52.320
<v Speaker 3>No, I won't go into details here, but from my perspective,

0:17:52.880 --> 0:17:57.120
<v Speaker 3>it is a responsibility the board takes very seriously. And

0:17:57.440 --> 0:18:02.680
<v Speaker 3>you know Elon has participated in that. We have leaders

0:18:02.880 --> 0:18:07.320
<v Speaker 3>in geographies that run large portions of the organization. We

0:18:07.400 --> 0:18:11.679
<v Speaker 3>have a really extensive executive team, and as I said before,

0:18:11.840 --> 0:18:16.080
<v Speaker 3>Elon works very closely. He's a hands on leader both

0:18:16.119 --> 0:18:20.040
<v Speaker 3>in the engineerings places, but also across the board from

0:18:20.080 --> 0:18:22.000
<v Speaker 3>an operational perspective as well.

0:18:22.040 --> 0:18:24.160
<v Speaker 1>And I realized that was a sensitive question to ask,

0:18:24.200 --> 0:18:26.600
<v Speaker 1>and forgive me, I will ask another sensitive one because

0:18:26.600 --> 0:18:28.800
<v Speaker 1>it is a time of sensitivity. We've just had the

0:18:28.800 --> 0:18:31.119
<v Speaker 1>death of Charlie Kirk. We've had Musk himself on his

0:18:31.160 --> 0:18:35.200
<v Speaker 1>own platform X raising questions well about his own security

0:18:35.240 --> 0:18:36.720
<v Speaker 1>and the fact that he has focused on it. I

0:18:36.760 --> 0:18:39.199
<v Speaker 1>know it's something that you are focused on. What is

0:18:39.240 --> 0:18:41.840
<v Speaker 1>the view, baores view on terms of upping his own

0:18:41.840 --> 0:18:42.800
<v Speaker 1>security right now?

0:18:45.720 --> 0:18:51.120
<v Speaker 3>Yeah, so very tragic circumstances this week. I think there

0:18:51.160 --> 0:18:55.200
<v Speaker 3>isn't anybody in a boardroom that isn't touched by what's

0:18:55.240 --> 0:19:01.080
<v Speaker 3>happened with Charlie Kirk, and also you know, there have

0:19:01.119 --> 0:19:04.640
<v Speaker 3>been other incidents you know, in the executive world over

0:19:04.680 --> 0:19:08.240
<v Speaker 3>the last twelve months that I think every board stops

0:19:08.240 --> 0:19:13.240
<v Speaker 3>and thinks about security of their CEOs but also their

0:19:13.520 --> 0:19:17.679
<v Speaker 3>executive team. And it's no different at Tesla. We have

0:19:17.800 --> 0:19:21.040
<v Speaker 3>been focused as a board on inland security for many

0:19:21.119 --> 0:19:25.000
<v Speaker 3>years now. He's been very public and very much out there,

0:19:25.680 --> 0:19:29.280
<v Speaker 3>and so it is something that we takes it very seriously.

0:19:29.359 --> 0:19:33.560
<v Speaker 3>He takes it very seriously as well, and so so

0:19:34.200 --> 0:19:37.000
<v Speaker 3>again from a board perspective, it is something that we've

0:19:37.440 --> 0:19:38.800
<v Speaker 3>discussed at.

0:19:38.760 --> 0:19:41.399
<v Speaker 2>Length, Robin. There are a number of other proposals in

0:19:41.440 --> 0:19:45.080
<v Speaker 2>the proxy. One is a shareholder initiated proposal for Tesla

0:19:45.119 --> 0:19:48.920
<v Speaker 2>to invest in Extai. It is non binding. The board

0:19:48.960 --> 0:19:51.320
<v Speaker 2>doesn't take a position, but how does the board think

0:19:51.320 --> 0:19:54.719
<v Speaker 2>about it. For example, if investors would say no, we

0:19:54.800 --> 0:19:58.800
<v Speaker 2>don't want Tesla to make that investment, with the board

0:19:58.880 --> 0:20:00.760
<v Speaker 2>still look to pursue it independently.

0:20:01.400 --> 0:20:05.600
<v Speaker 3>So clearly there are sixteen proposals overall in the proxy.

0:20:06.119 --> 0:20:08.240
<v Speaker 3>I know we've spent quite a bit of time on

0:20:08.240 --> 0:20:13.040
<v Speaker 3>one important one on compensation, but the Xai proposal is

0:20:13.080 --> 0:20:15.920
<v Speaker 3>a shareholder proposal that has been put into the board.

0:20:16.200 --> 0:20:20.240
<v Speaker 3>We value our shareholders input and the reason why we

0:20:20.560 --> 0:20:23.320
<v Speaker 3>have not put a recommendation is we want to hear

0:20:23.359 --> 0:20:27.760
<v Speaker 3>from shareholders in terms of what their views are as

0:20:27.760 --> 0:20:33.080
<v Speaker 3>to whether or not we should make an investment in XAI. Well,

0:20:33.119 --> 0:20:35.560
<v Speaker 3>one thing I will say at the outset is there's

0:20:35.600 --> 0:20:40.040
<v Speaker 3>a lot of misunderstanding of AI in the marketplace. It

0:20:40.119 --> 0:20:43.680
<v Speaker 3>is not one thing, okay, it is a range of technologies.

0:20:43.720 --> 0:20:47.080
<v Speaker 3>What Tesla is doing today with AI is quite different

0:20:47.119 --> 0:20:51.840
<v Speaker 3>to what XAI does. XAI is working on fundamental areas

0:20:52.000 --> 0:20:56.800
<v Speaker 3>in AI, but it's also working on large language large

0:20:56.880 --> 0:20:59.960
<v Speaker 3>language models. That's not what Tesla's doing. As you can

0:21:00.080 --> 0:21:07.159
<v Speaker 3>and see behind me. With Optimists, we're taking real world

0:21:07.560 --> 0:21:12.560
<v Speaker 3>application of AI and putting it into physical products to

0:21:12.680 --> 0:21:18.240
<v Speaker 3>actually empower those products to do things. So with Optimists,

0:21:18.240 --> 0:21:21.840
<v Speaker 3>it's very visual. You can see what he does in

0:21:21.960 --> 0:21:26.760
<v Speaker 3>terms of visualizing things and then actually doing things. And

0:21:26.800 --> 0:21:28.879
<v Speaker 3>the same with the vehicle. So what we're doing with

0:21:28.960 --> 0:21:34.840
<v Speaker 3>AI within FSD is actually taking that visual data and

0:21:34.960 --> 0:21:37.719
<v Speaker 3>using that to drive the car. And so that's quite

0:21:37.760 --> 0:21:39.520
<v Speaker 3>different to what an XAI does.

0:21:39.720 --> 0:21:42.200
<v Speaker 2>Robin a very quick question, and then we will end

0:21:42.240 --> 0:21:46.000
<v Speaker 2>on the final proposal for the compensation package. This week,

0:21:46.040 --> 0:21:52.240
<v Speaker 2>Bloomberg reported an investigation about some fatal incidents where passengers

0:21:52.400 --> 0:21:56.479
<v Speaker 2>or those inside the vehicle had difficulty using the manual release. Now,

0:21:56.520 --> 0:21:58.159
<v Speaker 2>as you know, I drive a test a vehicle, You

0:21:58.200 --> 0:22:00.480
<v Speaker 2>drive a test a vehicle. All I want to ask

0:22:00.600 --> 0:22:03.320
<v Speaker 2>is the board aware of that reporting and will it

0:22:03.520 --> 0:22:07.040
<v Speaker 2>raise that issue with Elon And is Tesla looking at

0:22:07.040 --> 0:22:08.960
<v Speaker 2>the design of the door manual override.

0:22:09.080 --> 0:22:11.879
<v Speaker 3>So I can tell you that the board takes very

0:22:12.520 --> 0:22:19.040
<v Speaker 3>seriously any safety related reporting or any incidence of any

0:22:19.119 --> 0:22:22.760
<v Speaker 3>type globally in terms of what we look at. But

0:22:22.960 --> 0:22:25.919
<v Speaker 3>in the Tesla there is a manual override already, and

0:22:25.960 --> 0:22:29.120
<v Speaker 3>in fact it's been reported on that you can actually

0:22:29.720 --> 0:22:33.159
<v Speaker 3>manually open the door if there is a power event

0:22:33.280 --> 0:22:36.840
<v Speaker 3>or anything like that. So safety is our number one

0:22:38.320 --> 0:22:40.480
<v Speaker 3>factor in terms of what we're doing.

0:22:40.640 --> 0:22:43.200
<v Speaker 2>And Tesla ranks very highly on safety, very highly.

0:22:43.280 --> 0:22:47.520
<v Speaker 3>It's also why we're pursuing FSD because you know, just

0:22:47.600 --> 0:22:50.280
<v Speaker 3>in North America there are fifty thousand deaths on the road.

0:22:50.359 --> 0:22:53.840
<v Speaker 3>That's fifty thousand too many, and so and we know

0:22:54.000 --> 0:22:57.760
<v Speaker 3>with the data that we have for FSD that it's

0:22:57.920 --> 0:23:01.520
<v Speaker 3>actually safer than a human drive because of those fifty

0:23:02.080 --> 0:23:04.560
<v Speaker 3>ninety four percent of human error. So if you can

0:23:04.600 --> 0:23:08.800
<v Speaker 3>eliminate five percent of that, that's a lot of deaths

0:23:08.840 --> 0:23:12.080
<v Speaker 3>that you can avoid. And so again, safety is one

0:23:12.119 --> 0:23:17.280
<v Speaker 3>of our key priorities in any aspect of the business.

0:23:17.680 --> 0:23:22.720
<v Speaker 2>Let's end on this unprecedented proposal, and I'm going to

0:23:22.720 --> 0:23:26.520
<v Speaker 2>ask you this, what would happen if to Tesla if

0:23:26.560 --> 0:23:29.480
<v Speaker 2>Elon Musk left tomorrow, you know, in order to try

0:23:29.520 --> 0:23:34.080
<v Speaker 2>and help shareholders understand the board's motive here in keeping him.

0:23:34.480 --> 0:23:36.560
<v Speaker 2>But there was one specific question from our audience which

0:23:36.560 --> 0:23:39.920
<v Speaker 2>I really appreciated. Why does Elon need to be CEO?

0:23:39.960 --> 0:23:41.920
<v Speaker 2>Could he not take on a more technical role?

0:23:42.680 --> 0:23:46.840
<v Speaker 3>Well, that is contemplated in the package. Just like in

0:23:46.880 --> 0:23:51.040
<v Speaker 3>the twenty eighteen package. We want his service at the company.

0:23:51.320 --> 0:23:53.439
<v Speaker 3>He can be the CEO, but he can also be

0:23:53.960 --> 0:23:57.000
<v Speaker 3>in another role, whether it's Chief product officer or that

0:23:57.040 --> 0:24:01.359
<v Speaker 3>type of thing. We've contemplated that before. But to me,

0:24:01.480 --> 0:24:05.720
<v Speaker 3>I think the really key thing is that shareholders get

0:24:05.760 --> 0:24:09.320
<v Speaker 3>to vote on the future of the company, not just

0:24:09.400 --> 0:24:13.440
<v Speaker 3>on a compensation package. The compensation package is the instantiation

0:24:13.640 --> 0:24:17.280
<v Speaker 3>of the goals and ambition, the super ambitious goals that

0:24:17.320 --> 0:24:20.280
<v Speaker 3>we have as a company, and so I think with

0:24:20.400 --> 0:24:24.640
<v Speaker 3>this proposal, it's really up to shareholders what the future

0:24:24.680 --> 0:24:25.919
<v Speaker 3>of Tesla looks like.

0:24:27.080 --> 0:24:30.800
<v Speaker 2>Robin Denholm, chair of Tesla's board. There is a key

0:24:31.040 --> 0:24:34.000
<v Speaker 2>shareholder vote in November on what is We've said it

0:24:34.080 --> 0:24:38.400
<v Speaker 2>an unprecedented proposal on a compensation package for elam Musk,

0:24:38.480 --> 0:24:43.200
<v Speaker 2>set against very high bar deliverables. But what a conversation

0:24:43.280 --> 0:24:47.040
<v Speaker 2>Caroline to inform the understanding of some of those deliverables.