Tesla Board Warns: Vote for Musk’s $1 Trillion Pay Package or Risk Losing Him
Tesla Board Chair Robyn Denholm has issued a stark warning to shareholders: approve Elon Musk’s proposed $1 trillion compensation package or risk losing the CEO’s “time, talent and vision.” The urgent plea comes ahead of Tesla’s annual shareholder meeting on November 6, with voting closing at 11:59 PM ET on November 5.
Key Takeaways
- Tesla Board urges approval of Musk’s $1 trillion performance-based pay package
- Voting deadline: November 5 at 11:59 PM ET
- Board warns Musk might leave if package isn’t approved
- Package requires Tesla to reach $8.5 trillion market cap for full payout
The Stakes for Tesla’s Future
In her letter to shareholders, Denholm emphasized that “without Elon, Tesla could lose significant value” and might no longer be valued for its ambitious transformation beyond being “just another car company.” She argued that Musk’s leadership is essential as Tesla moves into autonomous solutions and AI technologies.
The proposed compensation plan, outlined in September, consists of 12 tranches of stock grants tied to performance milestones. If approved, Musk could receive up to $1 trillion in stock if he achieves key targets, including growing Tesla to an $8.5 trillion market capitalization—a 500% increase from current valuation.
Opposition and Musk’s Response
Several advisory firms have opposed the massive pay package. Institutional Shareholder Services (ISS) urged shareholders to vote against it, citing “unmitigated concerns” with the plan’s magnitude and design. ISS noted that while retention is a key goal, “there are no explicit requirements” to ensure Musk focuses on Tesla over his other ventures.
Musk responded strongly, calling proxy firms like ISS “corporate terrorists.” He stated, “I just don’t feel comfortable building a robot army here and then being ousted because of some asinine recommendations from ISS and Glass Lewis who have no freaking clue.”
Board’s Rationale for the Package
Denholm explained that the board designed the package to “retain and incentivize Elon to capitalize on the unique opportunities that lie ahead for Tesla.” The plan conditions Musk’s compensation on his commitment to lead Tesla for at least another 7.5 years while driving the company to “ambitious new heights.”
The board believes Musk “singularly possesses the leadership characteristics and technical manufacturing know-how” to maximize long-term shareholder value. They argue that at a time when companies are racing to develop AI technologies, Tesla cannot risk losing “the best leader in the industry.”
Shareholders are being asked to vote for three key proposals that would approve the pay package and re-elect board members who support Musk’s vision.
