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Tesla board should take on an 'independent, active' role

Even while the stock is down nearly 29% year-to-date, Tesla (TSLA) shareholders voted in approval of CEO Elon Musk's pay package.

"That's a pretty remarkable statement of confidence on their part. What I said was it does not take anything away from the enormous scale of his achievements in building Tesla and not just Tesla," Fletcher School of Law and Diplomacy Lecturer and Picking Presidents Author Gautam Mukunda tells Market Domination Overtime.

Based on Tesla's growth under Musk's leadership, Mukunda likens a Tesla without Elon Musk at the helm as a Ford without Henry Ford, stipulating Tesla's board should take a more hands-on approach with the company:

"The board should take a much more independent and active role in the company. What I would say is that there is no such thing as a genius so brilliant that all of their ideas are good ones, or even their good ideas can't be improved by pressure from other smart, capable people. I think the board has given him sort of total freedom to do whatever he wants"

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For more expert insight and the latest market action, click here to watch this full episode of Market Domination Overtime.

This post was written by Luke Carberry Mogan.

Catch up on Yahoo Finance's coverage of all things Tesla, Elon Musk, and his pay package saga:

EV competitors like Ford, GM are 'scared' of Tesla: Investor

'Don't fire Steve Jobs': Tesla analysts react to approval of Elon Musk's pay package

'Hold on Tesla and wait,' don't buy right now: Strategist

Tesla is in 'incredibly enviable' position for real-world AI

Tesla is biggest market bubble in world history: Short seller

Don't bet against Elon Musk: Dan Ives talks $1T Tesla call

Elon Musk wins Tesla shareholder battle to keep his record-breaking pay

Elon Musk has been integral to Tesla's growth, AI: Cathie Wood

Musk's pay battle is not over. Here's why.

Video transcript

Elon Musk's famous optimism is just one of the reasons that Tesla shareholders voted to approve a pay package for the CEO that could be worth as much as $56 billion.

I think just based on vehicle autonomy, we can we can 10 X 110 X the value of the company.

Um, I believe that's what will happen.

He believes that's what will happen, will it?

Who knows?

Where is Musk and the EV maker?

Where do they go from here?

Joining us now is Gotham Makana Fletcher School of Law and Diplomacy, lecturer and author of Picking Presidents.

It's good to See you again, Gotham.

So, uh, you recently wrote about that?

You did not necessarily think that Musk is the right leader for Tesla right now.

Shareholders seem to disagree, and they're willing to pay him for the privilege of having him continue to run Tesla for now.

What do you think That he now even has more of sort of carte blanche to run Tesla as he would like?

Um, he won and it wasn't a close call, right?

He won by a lot, and so there's no way he doesn't interpret this as A.

He doesn't interpret this as something of a of a free hand, and he should.

I mean, like shareholders who supported him even after a more than 50% drop in the style valuation of the company over the last few years.

That's a pretty remarkable to be a statement of confidence on their part.

And I just I just sort of what I said was it does not take anything away from the enormous scale of his achievements in building Tesla.

And not just Tesla, right?

Tesla is not his most impressive company.

I would say that SpaceX so either one of these companies would be remarkable both on is even more so.

It doesn't take anything away from the scale of those achievements.

To say that the challenges that Tesla is facing now are not the same as the challenge that as the as the challenges that he triumphed over earlier, and it might take a very different skill set for those.

And so go.

Are you are are you implying then you know that that maybe they should.

Some somebody on the bench at Tesla should be being groomed here to take take, uh, his role at some point.

So So Tesla is unique, right?

Because you cannot imagine Tesla without Elon Musk.

I mean, like, you could say, you couldn't imagine Ford of that Henry Ford.

But eventually that problem had to be faced.

In Tesla's case.

Well, I don't know.

I don't know what Tesla's valuation would be without Elon, but it would be a lot lower.

My suggestion would actually be a little different from that.

It's that the board should take a much more independent and active role in the company.

What I would say is that there is no genius, no such thing as a genius so brilliant that all of their ideas are good ones.

Or even their good ideas can't be improved by pressure from other smart, capable people.

I think the board has given him sort of total freedom to do whatever he wants in ways that you know, the last three few years of Tesla's performance, just that they're not working as well as they used to.

And it's time for them to step in that, or for things like, you know, the cyber truck, for example, Maybe when that was decided to devote huge fraction of resources of the company to that, the board should have stepped in and said, You know, does this really make sense?

Can you really make a case as to why do this?

What's the analysis of why this is a good idea?

And it would have turned out and maybe the decisions would have turned out a little bit different.

It doesn't seem like there's any chance of that that imminently, certainly that that's gonna be happening.

Um, and in the meantime, you know, he had made this threat against the company that he was going to take his attentions elsewhere if this pay package didn't pass.

And now that seems to have dissipated.

But just as a reminder, he runs a lot of companies, right?

Tesla is not his only company.

He runs a of course, there's SpaceX.

There's Xa.

I, um And so going forward, um, you know, does does this sort of draw him back to Tesla to some extent, because he did get this victory.

I mean, it's hard to know.

Remember that before this pay pack, this whole debate over this current pay package, he had actually said that his expectation would be that there would be another, even larger one that would be granted to him after this one came through.

So I mean, he has sort of already said that this is not enough now that being once he said it like, it's easy to say that, Well, you mean it was that just a bargaining thing.

But it's kind of a striking thing for him to say that having that 25% of the company is not enough.

Um, I'll also say I it's a little hard to see how that threat is plausible.

Tesla is by far his largest source of liquid wealth, and, you know, for him to monetize his assets.

And SpaceX, for example, would be pretty complicated.

Um, and so I'm not sure he has the ability to walk away.

But he's Elon Musk.

He does lots of things that no one else would do.

I would never say anything is impossible.

Um, I would be concerned if I was the board and I would look very closely at again the SpaceX model, right?

So Elon does not run SpaceX on a day to day basis.

That's when shot well, and she's done an extraordinary job, she is, by most measures, I think has a really good art company to be the greatest aviation executive of the last 50 years.

Maybe more than that, um, it might be time for the board to say, Hey, if you want to spend your time on other things, let's find a win shot.

Well, for Tesla, who can be your partner, not your replacement?