Here's why Tesla could finally go big on advertising despite Elon Musk's qualms1 min read . Updated: 29 May 2020, 08:19 AM IST
Elon Musk has opposed paying for traditional advertising and criticized other companies for spending on marketing rather than on improving their products.
- Many shareholders however feel it is time to advertise Tesla products even if the company's board opposes the measure.
Tesla Inc. shareholders will vote in July on whether the electric-car maker should start doing something Elon Musk has long resisted: advertise its cars.
James M. Danforth, a San Diego-based holder of 850 Tesla shares, is proposing that the company spend at least $50 per vehicle produced to advertise its products.
Tesla’s board opposes the measure.
“Advertising can increase brand value, product awareness and interest," Danforth wrote in the proposal, which is included in Tesla’s proxy statement. “Tesla ads can help mitigate and dilute substantial FUD (‘Fear, Uncertainty, Doubt’) and misinformation campaigns sponsored by competitors and detractors worldwide and steer the narrative more favorably."
Musk, 48, has opposed paying for traditional advertising and criticized other companies for spending on marketing rather than on improving their products. The chief executive officer prefers to promote Tesla himself on Twitter, where he has almost 35 million followers, and through other even less conventional means.
This week, NASA astronauts rode in Tesla Model X crossovers on their way to the rocket built by one of Musk’s other ventures, Space Exploration Technologies Corp. In February 2018, a SpaceX rocket carried a cherry red Tesla Roadster into space.
“While we welcome stockholder feedback, we also believe we have an experienced management team that is best situated to determine Tesla’s day-to-day business operations, including our sales and marketing practices and expenditures," the board said in its opposing statement.
Tesla confirmed in the filing that one tranche of Musk’s moonshot pay award has vested. The last milestone needed for the CEO to collect 1.69 million stock options that he can exercise at $350.02 apiece occurred on May 5, according to data compiled by Bloomberg. The options were worth more than $700 million at that time.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.