Tesla Chair Robyn Denholm has issued a strong warning to shareholders ahead of the company’s annual meeting on November 6. She said CEO Elon Musk might leave Tesla if his massive Rs278,000,000,000,000 ($1 trillion) performance-based pay plan is rejected.
Denholm, in her letter to shareholders, described the proposal as essential to retain and motivate Musk to keep leading Tesla for at least another seven-and-a-half years.
The board’s appeal comes as Tesla faces mounting criticism from investors and governance experts. Many have questioned whether the board is acting independently and in shareholders’ best interests, raising concerns about Musk’s dominant influence over the company.
Denholm defended the compensation plan, saying it was not merely about money but about ensuring Musk’s continued leadership in Tesla’s ambitious vision for electric vehicles, energy storage, and artificial intelligence.
The letter is seen as a final effort to secure support before the upcoming vote, as some investors argue the proposed package is excessive and could hurt shareholder value.
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Musk's leadership was "critical" to Tesla's success, she said, and warned that without a plan that properly incentivizes him, the company could lose his "time, talent and vision". Musk's role was vital as Tesla seeks to become a global leader in artificial intelligence and autonomous technology, she said.
The proposed package would grant Musk 12 tranches of stock options tied to ambitious targets, including a market capitalization of $8.5 trillion and milestones in autonomous driving and robotics.
Denholm's letter portrays the package as necessary to align Musk's incentives with shareholder value and long-term growth, also urging investors to re-elect three long-serving directors who have worked closely with him.
Tesla's board has been under scrutiny for years over its close relationship with Musk. A Delaware court earlier this year struck down his 2018 pay deal, finding it was improperly awarded and negotiated by directors who were not fully independent.
This move shows how dependent Tesla remains on Elon Musk’s leadership and global image. The warning also reveals deep tension between corporate governance and Musk’s individual power within the company. If he leaves, Tesla’s future direction could face uncertainty.
