Tesla’s recent 10-K/A filing with the Securities Exchange Commission reflects the confidence it has in CEO Elon Musk’s leadership as well as its current board of directors. Tesla filed its Annual Report on Form 10-K for the fiscal year ending December 31, 2022 on February 7, 2022. In the explanatory note, Tesla stated that this amendment was being filed to do these three things:
- Amend Part III, Items 10, 11, 12, 13, and 14 of the Original Form 10-K to include the information required by such Items;
- Delete the reference on the cover of the Original Form 10-K to the incorporation by reference of portions of our proxy statement into Part III of the Original Form 10-K;
- File new certifications of our principal executive officer and principal financial officer as exhibits to this Amendment under Item 15 of Part IV hereof, pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
In Part III of the filing, Tesla listed its leadership team along with a brief paragraph about each. Regarding Elon Musk, Tesla said,
“We believe that Mr. Musk possesses specific attributes that qualify him to serve as a member of the Board, including the perspective and experience he brings as our Chief Executive Officer, one of our founders, and our largest stockholder, which brings historic knowledge, operational expertise and continuity to the Board.”
In the filing, Tesla also added that Elon Musk’s Twitter post about taking Tesla private and the ensuing drama (the SEC investigation and settlement) posed no restriction on Elon Musk’s ability to serve as an officer or director on the board other than its Chair for a specified time. Here’s exactly what Tesla said:
“On October 16, 2018, the US District Court for the Southern District of New York entered a final judgment approving the terms of a settlement filed with the court on September 29, 2018, in connection with the actions taken by the SEC relating to Elon Musk’s August 7, 2018 Twitter post that he was considering taking Tesla private. On April 26, 2019, this settlement was amended to clarify certain of its terms, which was approved by the Court. Mr. Musk did not admit or deny any of the SEC’s claims, and there is no restriction on Mr. Musk’s ability to serve as an officer or director on the Board (other than as its Chair for a specified time).
In a recent TED Talk interview, Elon Musk opened up about the SEC and how he was forced to settle in order to save Tesla from bankruptcy.
“With Tesla, back in the day, funding was actually secured. I want to be clear about that. In fact, this may be a good opportunity to clarify that. Funding was indeed secured.
“The SEC knew that the funding was secured, but they pursued an active public investigation nonetheless. At the time, Tesla was in a precarious financial situation, and I was told by the banks that if I did not agree to settle with the SEC that the banks would cease providing working capital and Tesla would go bankrupt immediately.
“So, that’s like having a gun to your child’s head. I was forced to concede to the SEC unlawfully. Those bastards. And now it makes it look like I lied when I did not, in fact, lie. I was forced to admit that I lied to save Tesla’s life and that’s the only reason.”
The filing also goes over the executive compensation. Neither Elon Musk nor Jerome Guillen received a salary. This is due to Elon Musk not taking a salary and Jerome Guillen departing Tesla in June 2021. In regards to Elon Musk not taking a salary, Tesla noted,
“Mr. Musk historically earned a base salary that reflected the applicable minimum wage requirements under California law, and he was subject to income taxes based on such base salary. However, he has never accepted his salary. Commencing in May 2019 at Mr. Musk’s request, we eliminated altogether the earning and accrual of this base salary.”
Tesla also shared the following details about Elon Musk, his leadership, and compensation for his work.
“Historically, in developing compensation recommendations for our Chief Executive Officer, the Compensation Committee has sought both to appropriately reward our Chief Executive Officer’s previous and current contributions and to create incentives for our Chief Executive Officer to continue to contribute significantly to successful results in the future . Each of the 2018 CEO Performance Award and the performance-based stock option award granted to our Chief Executive Officer in August 2012 (the “2012 CEO Performance Award”) is focused on this latter objective, as it rewards future performance.
In addition to serving as our Chief Executive Officer since October 2008, Elon Musk has contributed significantly and actively to us since our earliest days in April 2004 by recruiting executives and engineers, contributing to investors vehicle engineering and design, raising capital for us and bringing to us and raising public awareness of Tesla.”
The filing reflects Tesla’s confidence in its CEO and executive team’s ability to lead. You can read the full document here.
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