Key Takeaways
- Tesla Chair Robyn Denholm warns there’s “no Elon Musk 2” if shareholders reject his $1 trillion pay package
- Musk threatens to leave Tesla if the compensation plan isn’t approved
- Board members are meeting major institutional investors to secure support before November 6 vote
- Advisory firms Glass Lewis and ISS oppose the massive compensation package
Tesla’s leadership is making an urgent appeal to investors: approve Elon Musk’s unprecedented $1 trillion compensation package or risk losing the visionary CEO entirely. Chair Robyn Denholm delivered the stark warning that there is simply no replacement for Musk if shareholders vote against the deal and he decides to walk away.
The Stakes for Tesla’s Future
Denholm and other board members are scheduled to meet Tesla’s largest institutional investors this week, including Vanguard, BlackRock, and State Street. Their mission is to gather crucial support ahead of the November 6 shareholder vote.
Musk has explicitly stated he may leave Tesla if the board rejects the proposed compensation package. The deal could be worth up to $1 trillion over the next decade, depending on Tesla’s market performance.
When questioned about Tesla’s backup plan if shareholders reject the deal, Denholm declined specifics but emphasized the negative consequences. “I don’t want to foreshadow anything on that front, but clearly, as a board, we have discussed what happens and we know that it wouldn’t be a good outcome for shareholders,” she told the Financial Times.
Board’s Dire Warning
Denholm framed the upcoming vote as critical for Tesla’s direction. “This is a vote for shareholders on the future of Tesla,” she stated. “There’s just not anybody, either inside or outside the organisation, that is Elon today.”
The current proposal follows a previous $56 billion pay deal that shareholders approved in 2023 but was struck down by a Delaware court. The court found Tesla’s board failed to exercise proper oversight in that compensation arrangement.
Under the new scheme, Musk could receive millions of Tesla shares if he successfully transforms the electric vehicle maker from its current $1 trillion valuation to an $8.5 trillion company within the next decade.
Musk’s Defense and Demands
After influential advisory firms Glass Lewis and ISS recommended voting against the package, Musk took to X to defend his position. “Tesla is worth more than all other automotive companies combined. Which of those CEOs would you like to run Tesla? It won’t be me,” he wrote.
The Tesla CEO’s wealth remains heavily tied to the company’s stock, which has more than tripled over the past five years. Tesla currently maintains a market valuation of approximately $1.4 trillion.
Musk has leveraged his Tesla holdings as collateral for other ventures, including his 2022 acquisition of Twitter (now X) and his artificial intelligence startup xAI. He currently owns 15% of Tesla and plans to vote his shares in favor of the compensation plan.
The billionaire argues he needs at least a 25% voting stake in Tesla to ensure the company’s AI projects “don’t fall into the wrong hands.”
Denholm reinforced this perspective, stating, “If we don’t have Elon at the helm, or he isn’t motivated or incentivised to create that future, then it’s a negative for all shareholders.”
