Elon Musk has served as Tesla’s high-profile CEO since 2008, playing a central role in transforming the company into the cultural phenomenon it is today. But Tesla is now warning that its tenure could soon come to an end if shareholders fail to approve the CEO’s massive compensation package.
In a letter shared on social media Monday, Tesla chair Robyn Denholm cautioned investors that if they do not back CEO Elon Musk’s unprecedented pay package—one that could ultimately cost the company up to $1 trillion—Musk might walk away from the company.
“When negotiating this performance award, we necessarily considered what Tesla’s future without Elon would look like, and we did not believe it was the future that our shareholders deserve. At a time when companies—both big and small—are competing to be the first to bring groundbreaking AI technologies to market, we could not risk losing the best leader in the industry to put Tesla on top. Now is a pivotal moment for our company to emerge as a leader in AI, and with our exceptional CEO at the helm, we are perfectly positioned to seize it,” she wrote in the letter on Monday.
“Though it’s no question that Elon has other pursuits, he has proven that one of the many things that make him unique is his ability to stretch his capacity beyond normal limits and remain successful at Tesla. However, if we fail to foster an environment that motivates Elon to achieve great things through an equitable pay-for-performance plan, we run the risk that he gives up his executive position, and Tesla may lose his time, talent and vision, which have been essential to delivering extraordinary shareholder returns,” the letter continues.
“Without Elon, Tesla could lose significant value, as our company may no longer be valued for what we aim to become: a transformative force reimagining the fundamental building blocks of mobility, energy and labor, with products such as FSD and Optimus, and working to better humanity in the process. While there may be nothing wrong with being just another car company, our Board believes that Tesla can be more, that our shareholders deserve more, and that Elon is the right leader to help us achieve our full potential.”
Denholm closed her letter with a direct appeal to Tesla’s shareholders, calling on them to approve the proposals.
“If you care about building a better world for humanity and supporting our vision for Sustainable Abundance—then you should vote “FOR” Proposals One, Three and Four,” she wrote.
“If you want Tesla to have a shot at becoming the world’s most valuable company—then you should vote “FOR” Proposals One, Three and Four,” she concluded.
While this is certainly an eyebrow-raising post, it did not resonate with everyone, as many people offered some strong criticism.
“I doubled checked. None of the stocks I hold have ever sent out panicked posts begging their shareholders to vote on their proposals or to approve grossly overpaying their CEOs. This is just sad and pathetic,” someone else wrote.
“This Board of Directors is a disgrace. They should be in jail,” someone else added.
“‘we run the risk that he gives up his executive position,’ I’ll take things that will never happen for 1,000 alex. Does anyone believe this?” someone else wrote.
“How much money does one need?” someone else criticized.
This marks a major development for one of the world’s most influential and culturally significant companies. Whether Tesla’s shareholders ultimately approve Musk’s enormous compensation plan remains to be seen.
About Dave Kelsey
Bets on sports stuff.