Elon Musk might not stick around as Tesla’s CEO if shareholders vote down his proposed trillion-dollar compensation plan, according to Board Chair Robyn Denholm. In a letter sent to investors ahead of Tesla’s November 6 annual meeting, Denholm urged them to approve the record-breaking pay package, calling Musk’s continued leadership “critical” to the company’s future.
The plan, which would grant Musk 12 tranches of stock options tied to ambitious performance targets, has drawn sharp criticism from governance experts and shareholder groups. The total potential payout hinges on Tesla achieving milestones including an $8.5 trillion market valuation and major advances in self-driving technology and robotics. Denholm argued that the deal is necessary to keep Musk focused on Tesla as he juggles several other ventures, including SpaceX and xAI.
In her letter, Denholm wrote that without a compensation plan that properly incentivizes him, Tesla risks losing Musk’s “time, talent, and vision.” The board insists the structure aligns Musk’s interests with shareholders, motivating him to drive long-term growth and maintain Tesla’s position as a leader in artificial intelligence and autonomous driving.
Not everyone is convinced. Earlier this year, a Delaware court struck down Musk’s previous $56 billion pay deal from 2018, ruling it was improperly approved by a board that lacked independence. Critics have long accused Tesla’s directors of being too close to Musk to provide meaningful oversight. Governance advocates argue that the new trillion-dollar plan raises the same concerns, especially since many of the same directors remain on the board.
Proxy advisory firms Glass Lewis and Institutional Shareholder Services have already urged investors to vote against the proposal, citing excessive compensation and weak governance practices. Such recommendations carry significant weight with large institutional investors, who collectively control a sizable portion of Tesla’s shares.
Denholm also asked shareholders to re-elect three long-time directors who have worked closely with Musk, arguing that continuity in leadership is essential as Tesla scales up its AI and robotics ambitions. But the timing of her plea suggests the board is bracing for a potentially divided vote.
If the package fails, it could mark a turning point for Tesla. Musk has hinted in the past that he might devote more attention to his other companies if he feels underappreciated or restricted by Tesla’s board. Whether that’s a genuine threat or a negotiation tactic remains unclear, but for now, investors face a stark choice: approve the largest CEO pay deal in history or risk losing the man who built the world’s most valuable car company.