Tesla Chair Robyn Denholm has warned that Elon Musk could step down as chief executive if shareholders reject a proposed $1 trillion performance-based pay package, calling his leadership “critical” to the company’s future.
In a letter sent to shareholders on Monday, Denholm urged approval of the plan ahead of Tesla’s November 6 annual meeting, where investors will vote on what would be the largest compensation deal in corporate history.
The package would grant Musk 12 tranches of stock options tied to a series of ambitious milestones — including an $8.5 trillion market capitalization, progress in autonomous driving, and breakthroughs in robotics and artificial intelligence.
Denholm argued the plan is essential to retain and motivate Musk for at least another seven and a half years. “Without a compensation plan that properly incentivizes him, Tesla could lose his time, talent, and vision,” she wrote.
Governance experts and shareholder advocacy groups have long criticized Tesla’s board for a lack of independence, citing its close ties to Musk. A Delaware court earlier this year struck down his 2018 pay package, ruling that it was improperly negotiated by directors too closely aligned with him.
Despite the controversy, Denholm insisted that Musk’s continued leadership is vital as Tesla seeks to position itself as a global leader in artificial intelligence and autonomous technology.
Proxy advisory firms Glass Lewis and Institutional Shareholder Services (ISS) have urged investors to vote against the new package, saying it remains excessive and insufficiently justified.
The letter also calls on shareholders to re-elect three long-serving board members who have worked closely with Musk.
Even amid the boardroom tension, Tesla’s stock climbed 3.1 percent as of 11 a.m. in New York (15:00 GMT), reflecting investor optimism that Musk will remain at the helm, one way or another.
The latest news in your social feeds
Subscribe to our social media platforms to stay tuned