Political Landscape and Musk’s Loyalists at the Quest for Tesla’s Supremacy

Good Morning Ladies and Gentlemen

”The ideological positioning of the individual holds significant importance, as it fundamentally shapes the foundational basis of their perspective.”

me, when I talk to our children about education, politics

If the political pendulum in the US swings back due to widespread dissatisfaction among diverse segments of the population regarding unmet promises about living standards, America could shift to a more left-leaning stance in the future than during the Democratic administrations of Obama and Biden. The election of the charismatic and youthful immigrant Zohran Mamdani could catalyse such a change. This scenario could emerge as an unintended consequence of excessive austerity measures and erratic tariff policies implemented by the current US government, leading to job losses and increased consumer prices. During election campaigns, politicians often engage in vigorous debates; however, once they are elected or re-elected, many tend to revert to familiar patterns that restrict them to their political comfort zones, frequently failing to deliver on the promises made during their campaigns. In this context, the American president, to some extent, and especially the Argentine president, stand out as notable exceptions, regardless of one’s opinion on their actions. In contrast, the newly elected German chancellor has thus far implemented few, if any, of his election commitments.

Warren Buffett

You know, Ladies and Gentlemen, Warren Buffett reportedly proposed that nations could effectively mitigate their budget deficits by implementing a legislative framework whereby elected officials whose policy decisions result in a deficit exceeding three per cent of Gross Domestic Product (GDP) would face immediate dismissal from office. This assertion underscores the potential for accountability mechanisms within political systems to enhance fiscal responsibility.

Tesla

Tesla shareholders have approved a $1 trillion compensation package for CEO Elon Musk, the highest compensation package ever granted. The vote paves the way for Musk to become the first trillionaire and increase his stake in Tesla to 25% or more over the next decade. Elon Musk is offered the prospect of a trillion-dollar stock package because Tesla shareholders have voted in favour of this unprecedented compensation plan for him. However, he must achieve ambitious goals to receive it. This enormous bonus is inappropriate for several reasons.

Why might it be seen as Inappropriate?

I suppose this is a matter of perspective, yet the excessive size of the CEO pay package, the most extensive ever, far surpasses typical executive compensation.
While Tesla’s board has been criticised for lacking independence and failing to scrutinise the deal adequately, it has exhibited somewhat weak oversight, as the package could significantly dilute the stakes of existing shareholders. Then, some performance goals are seen as either unattainable or encouraging risky, short-term behaviour by Tesla insiders. I cannot judge them, as I lack that specific knowledge. Whether the targets are realistic or not remains to be seen; in any sense, the package increases Tesla’s reliance on Elon Musk, raising concerns about “key person” risk and leading to overdependence. Finally, the scale of the award has drawn criticism amid broader concerns about income inequality and corporate governance and could trigger public backlash, eventually leading to stricter regulation.

Stats

A week ago, the Challenger Report unveiled a notable decline in the labour market. October witnessed the highest number of layoffs in 21 years, while hiring reached its lowest level in 14 years. Consumer confidence, as measured by the University of Michigan, is now at the second-lowest point since 1980. Following the release of the Challenger Report, a risk-off sentiment spread through the capital markets last Thursday. However, markets rebounded on Friday as buying activity resumed. The pressing question remains: when, if ever, will this downward trend gain further momentum? With the U.S. government shutdown now resolved, at least until the end of January 2026, employees at statistical offices will soon return to work, meaning official statistical data will start flowing into the financial markets once again.

Ladies and Gentlemen

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I wish you an excellent start to the day and weekend!

Yours truly,

Stefan M. Kremeth
CEO & Head of Wealth Management
Incrementum AG – we love managing assets

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