Tesla chair: Elon Musk could leave Tesla without $1 trillion pay package
Add Axios as your preferred source to
see more of our stories on Google.
Photo illustration: Aïda Amer/Axios. Photo: Marc Piasecki/Getty Images
The chair of Tesla's board is exhorting shareholders to endorse the company's proposed pay package for CEO Elon Musk, saying that Musk could leave if it isn't approved.
Why it matters: Musk insinuated last week during the company's quarterly earnings call that he doesn't want to devote time to building an "enormous robot army" without what he views as adequate control over the company.
Driving the news: Tesla chair Robyn Denholm Monday framed the upcoming shareholder vote in a latter on X as a "fundamental question" for investors:
- "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?"
- The typically reclusive Denholm said that failing to "foster an environment that motivates Elon," creates the risk that Musk could walk, saying, "Tesla may lose his time, talent and vision, which have been essential to delivering extraordinary shareholder returns."
Catch up quick: Musk's pay package could be worth up to nearly $1 trillion if the executive hits a series of increasingly ambitious performance benchmarks over the next 7.5 years.
Musk reiterated to analysts Wednesday that he's worried about devoting significant effort toward his vision for Tesla's humanoid future only to "be ousted at some point in the future."
- "That's my biggest concern," he said on the earnings call. "That is really the only thing I'm trying to address with this so-called compensation."
- He added: "I don't feel comfortable building that robot army if I don't have at least a strong influence" via stock ownership.
- Musk currently owns about 15% of Tesla, according to S&P Capital IQ.
The other side: Stockholder advisory firms ISS and Glass Lewis recently recommended that shareholders reject the pay package, citing its sheer magnitude and dilutive nature for existing shareholders.
- Several state treasurers and other investors, including SOC Investment Group, recommended against the measure and said they lack confidence in the board's willingness to provide sufficient oversight of Musk and deliver sustainable returns for shareholders.
What's next: Shareholder voting ends Nov. 5, and the company is expected to reveal preliminary results during its annual meeting on Nov. 6.
