Good Morning! Today’s topics aren’t the only things heating up, as the June heat waves set records in central and northeast states. In this newsletter, we’re going to be covering:

• Pay Day: The approval of Elon Musk’s $56 billion pay package

• Big Bans: The continued growth for ZYN nicotine pouches in America

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Tesla Shareholders Approve Musk’s $56 Billion Pay Package

Elon Musk, the co-founder and CEO of Tesla, has been in the hot seat for his pay package despite a turbulent stock price.

• Year-to-date, Tesla’s stock price is down nearly 26%, with a year-over-year loss of over 32%.

We wonder why shareholders were questioning the enormous pay package…

Shareholders expressed concerns over continued losses and Musk’s ability to effectively run Tesla amid his other ventures, X (formerly known as Twitter) and xAI. The full pay package was triggered if certain targets were met, like market value, revenue, and profitability.

Musk's 2018 compensation package, initially valued at $2.3 billion, surged with Tesla's stock price but has declined this year alongside the share price, dropping from around $56 billion in January.

Even with opposition from large institutional investors and proxy firms, a majority vote did result in the pay package approval.

Musk won’t be getting his payday just yet, as there is still an ongoing Delaware court lawsuit. A judge invalidated Musk’s lofty pay package in January citing conflicts of interest and personal ties to the board that approved the initial package back in 2018. The Delaware lawsuit could take months to work out.

ZYN Nicotine Pouches Popularity Continues to Grow in America but……

The nicotine market is experiencing a series of unfortunate events. The newfound success of ZYN, has sparked the attention of the FDA.

In its fourth quarter conference call, Philip Morris International reported

• 80% year over year volume increase of Zyn cans in the U.S.

• Phillip Morris overall saw its revenue increase 11%

• Organic operating profit climb 22% to $3.0 billion.

Part of the reason ZYN has gained popularity in America is due to the $16 billion acquisition of ZYN maker Swedish Match by Philip Morris in 2022. Post-acquisition, sales for ZYN in the US increased by 80%.

Since ZYN products hit the market in 2014, the FDA has not paid close attention. However, with widespread growth, especially by a younger population, the FDA is taking a closer look. Although there is no formal ZYN ban, the FDA issued 119 warning letters and filed 41 civil money penalty complaints against retailers selling to individuals under 21.

In addition, the FDA has yet to authorize different flavors of ZYN, issuing letters to online retailers for the sale of flavors. The FDA is still waiting to approve the authorization of ZYN, which was applied for in 2020, leaving the future of ZYN glim.

Just recently, in June 2024, the District of Columbia issued a subpoena to Philip Morris International, citing the sale of flavored pouches. This caused all online ZYN sales to stop.

Graph of The Week

Headline Roundup

• John Deere is laying off hundreds of workers in the US and moving their jobs to Mexico. The agricultural equipment company’s decision has been criticized by the workers.

• Wells Fargo fires employees for pretending to work. Workers were let go after a crackdown on devices and software used to simulate computer mouse activity.

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DISCLAIMER: None of this is financial advice. This newsletter should be used for discussion, education, and illustrative purposes only and should not be construed as professional financial advice, solicitation, or recommendation