Why Musk is tied to Tesla

If Tesla loses its momentous shareholder vote on CEO Elon Musk's $56 billion pay package on Thursday — an outcome that's entirely possible — then Musk will suffer a very bruised ego. Don't expect him to leave the company, however.

Why it matters: Musk is Tesla's largest shareholder, which gives him roughly 75 billion reasons to root for the stock's continued health. On top of that, Tesla lies at the heart of Musk's web of companies. Were Musk to leave the carmaker, that would cause serious damage to the rest of his $200 billion fortune.

The big picture: Musk uses Tesla engineers at X, will use Tesla's trove of driving data at his AI startup, and reportedly uses Tesla's AI chips wherever in his empire he wants to redirect them.

• More broadly, as Musk's only public company, Tesla gives Musk a degree of liquidity and funding that he can't find anywhere else in his empire.

Where it stands: Elon Musk owns about 13% of Tesla, but he wants to own 25%. Reinstating his pay award from 2018 — which was deemed illegal by a Delaware court — would close about half of the gap but still leave Musk wanting a huge new pay package this year.

• A shareholder vote supporting reinstatement might persuade the Delaware judge to give Musk his money back — or it might not.
• If shareholders vote no on Musk's pay, on the other hand, that will send a very clear message that his ambitions are unrealistic and will never pass shareholder muster.

Between the lines: Tesla chair Robyn Denholm has told shareholders that the pay award is necessary "to keep Elon focused on Tesla." But it's not entirely clear that shareholders want Elon focused on Tesla.

• After all, another of Musk's companies, SpaceX, has become hugely valuable while largely running itself and taking up a relatively small slice of Musk's attention.
• Tesla, on the other hand, is struggling. Musk's personal obsession, the Cybertruck, is a national joke; its Supercharger team was laid off in April; and Cadillac's Lyriq EV is set to outsell Tesla's Model X this year.

The bottom line: A "no" vote that leaves Musk in charge of Tesla but focusing his attention elsewhere might be the best of both worlds, allowing Tesla the stock to retain the Musk premium while also allowing Tesla the carmaker to avoid more distractions like the ill-fated Cybertruck.