Tesla Chair Warns Musk Could Quit if $1 Trillion Pay Deal Fails
Elon Musk may step down as Tesla’s CEO if shareholders reject his proposed $1 trillion performance-based compensation package, Chair Robyn Denholm warned in a letter to investors on Monday.
The letter comes ahead of Tesla’s annual shareholder meeting on November 6, where investors will vote on the massive pay proposal. The board has faced growing criticism from governance experts and advocacy groups who argue it has not acted independently or always prioritized shareholder interests.
Board Defends Musk’s Pay Plan
Denholm said the proposed plan is intended to motivate and retain Musk for at least another seven and a half years, emphasizing that his leadership remains “critical” to Tesla’s future success. Without proper incentives, she warned, the company risks losing Musk’s “time, talent, and vision.”
She added that Musk’s continued involvement is vital as Tesla pushes deeper into artificial intelligence and autonomous driving technology, aiming to strengthen its position as a global leader in innovation.
Performance Targets and Shareholder Alignment
The $1 trillion package would grant Musk 12 tranches of stock options, tied to demanding performance goals, including achieving a market capitalization of $8.5 trillion and significant milestones in robotics and self-driving technology.
Denholm said the plan is designed to align Musk’s incentives with shareholder value and long-term growth, while also urging investors to re-elect three long-serving directors who have worked closely with him.
Ongoing Scrutiny Over Tesla’s Governance
Tesla’s board has long faced questions about its close relationship with Musk. Earlier this year, a Delaware court struck down Musk’s 2018 pay plan, ruling that it had been improperly awarded and negotiated by directors lacking full independence.
Despite the controversy, Tesla’s leadership maintains that Musk’s vision and execution remain essential to the company’s continued growth in the competitive EV and AI sectors.
