Tesla Chair Appeals for Support of Musk’s $1 Trillion Pay Plan

Robyn Denholm, chair of Tesla, has made an urgent appeal to shareholders to approve a staggering $1 trillion compensation package for CEO Elon Musk. In a letter sent out on Monday, she cautioned that the company could face a loss of “significant value” should the proposal be rejected, potentially prompting Musk to resign from his position.

This plea for investor support comes just ahead of Tesla’s annual shareholder meeting scheduled for November 6, where the groundbreaking pay plan and other critical proposals will be voted on. Central to the board’s message is the assertion that Musk’s leadership is crucial as Tesla ventures deeper into areas like artificial intelligence, robotics, and autonomous driving. Without a new long-term incentive, there is a risk that Musk may not remain at the helm, despite having significantly shaped the company over the past decade.

In her letter, Denholm stressed, “Without Elon, Tesla could lose significant value, as our company may no longer be valued for what we aim to become.” She further noted that Musk's “time, talent and vision … have been essential to delivering extraordinary shareholder returns.”

Denholm also highlighted that if the shareholders do not endorse the pay package and fail to create a motivating environment for Musk through a fair pay-for-performance structure, the company risks losing him as CEO.

Tesla Chair Appeals for Support of Musk’s $1 Trillion Pay Plan The proposed $1 trillion performance award for Musk encompasses 12 tranches of restricted stock, each contingent upon achieving ambitious milestones, including a target market capitalization of $8.5 trillion—more than quadrupling Tesla’s current valuation. Among the operational goals are delivering 20 million vehicles and deploying millions of robotaxis and AI robots within the next decade.

To understand the scale of this proposal, it is noteworthy that this compensation plan represents the largest ever suggested in U.S. corporate history, eclipsing Musk's previous $56 billion compensation package from 2018. That earlier deal was invalidated by a Delaware court earlier this year due to a lack of proper board oversight and transparency during the approval process.

Business In her communication, Denholm posed a direct question to investors, asking, “Do you want to retain Elon as Tesla’s CEO and motivate him to drive Tesla to become the leading provider of autonomous solutions and the most valuable company in the world?”

Denholm characterized the upcoming vote as “a critical inflection point” for Tesla, underscoring the idea that Musk’s “unique” leadership is not easily replaceable. This is particularly pertinent as the company transitions from being “just another car company” to competing against rivals in the race to commercialize AI-driven vehicles and advanced robotics.

Despite the board's strong advocacy for Musk's pay package, opposition is growing. Notably, proxy advisory firms Institutional Shareholder Services and Glass Lewis have recommended that shareholders vote against the proposal, citing its unprecedented nature as a primary concern.

The board's appeal highlights a critical moment for Tesla as it seeks to secure the future leadership of one of the most influential figures in modern technology.