Tesla Chair Urges Shareholders to Back Musk’s $1 Trillion Pay Plan

Hadisur Rahman, JadeTimes Staff

H. Rahman is a Jadetimes news reporter covering Business

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Image Source: Reuters/Evelyn Hockstein

Tesla Chair Robyn Denholm has once again appealed to shareholders to approve CEO Elon Musk’s massive compensation package, warning that failure to do so could risk losing Musk’s leadership and vision. In a letter to shareholders on Monday, Denholm emphasized that Musk’s continued commitment to Tesla depends on a fair and motivating pay structure.

“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,” Denholm wrote, stressing that Musk’s leadership has been essential in driving Tesla’s growth across electric vehicles, robotics, and energy storage.

The proposed package, unveiled in early September, includes 12 tranches of stock options tied to ambitious performance targets. If achieved, the plan could ultimately cost Tesla close to $1 trillion. Despite criticism from some proxy advisers who claim the plan is excessive and dilutive, Tesla’s shares climbed more than 4% on Monday amid overall market gains.

Musk, known for his outspoken style, recently lashed out at proxy advisory firms ISS and Glass Lewis, calling them “corporate terrorists” for opposing the package. His previous 2018 pay plan remains under review by the Delaware Supreme Court after a trial judge ruled shareholders lacked sufficient information during the original vote.

Under the new proposal, Musk would be prohibited from selling any of his stock for at least 7.5 years, and he must meet a series of stretch goals, including achieving $400 billion in EBITDA and growing Tesla’s market capitalization to $8.5 trillion.

Analysts expect shareholders to approve the package at Tesla’s upcoming vote on November 6. Denholm concluded her letter by reaffirming the board’s belief that Musk’s leadership is irreplaceable, describing him as the only person capable of steering Tesla through its next era of innovation and growth.