Will Elon Musk leave Tesla as CEO? Chair Robyn Denholm warns shareholders if his $1 trillion pay package is rejected
Elon Musk may leave Tesla, which made him the richest person in the world, if shareholders do not approve his $1 trillion salary package.
In a letter to shareholders Monday, Chairman Robyn Denholm warned that consulting firms continue to ask them not to approve Elon Musk’s $1 trillion pay package at Tesla.
The appeal comes just days before the electric vehicle maker’s annual meeting on Nov. 6, where Tesla’s board is reportedly facing backlash for not acting in the best interests of shareholders.
Governance experts and advocacy groups have questioned Tesla’s board about its independence and oversight of Musk’s influence.
What did Tesla tell its shareholders?
In her letter to shareholders, Robyn Denholm said the proposed performance-based plan, which would provide Musk with a $1 trillion salary, is designed to retain and motivate the Tesla CEO to run his company for at least the next 7.5 years.
He said Elon Musk’s leadership was ‘critical’ to ensuring Tesla’s success.
The Tesla Chairman also warned that if the company doesn’t have a plan to properly incentivize Musk, it could lose his “time, talent, and vision,” adding that the CEO’s role is crucial as the EV maker aims to become a global leader in artificial intelligence and autonomous technology.
The proposed package would give Musk a market cap of $8.5 trillion and 12 tranches of stock options tied to ambitious goals including milestones in autonomous driving and robotics.
Denholm’s letter portrays the $1 trillion package as important for aligning Musk’s incentives with shareholder value and long-term growth, and also calls on investors to re-elect three long-serving executives who have worked closely with him.
Musk calls on Tesla shareholders to approve his $1 trillion paycheck
Last week, Elon Musk hijacked Tesla’s earnings call to urge shareholders to approve a $1 trillion pay package.
He also lashed out at shareholder advisory firms that opposed the proposal.
“There needs to be enough voting control to have a strong impact, but not so much that I can’t be fired if I go crazy,” Musk said, interrupting his CFO as the lengthy earnings call was about to wrap up.
Tesla’s board of directors has been under public scrutiny for years due to its close relationship with Elon Musk.
Earlier this year, a Delaware court struck down his 2018 salary agreement, finding that the deal was improperly awarded and negotiated by directors who were not fully independent.
