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7 Jun, 2024
1 min time to read

Tesla board chair Robyn Denholm has warned shareholders that failing to approve Elon Musk's $56 billion pay package could result in the CEO leaving the company.

On June 13th, shareholders will vote for the second time on Musk's compensation package after a Delaware judge voided the initial approval due to flaws in the process.

In a letter to shareholders filed with the SEC, Denholm emphasized the need for Musk’s unique compensation to drive Tesla’s success, hinting that he might move to other ventures without proper motivation.

Elon is not a typical executive, and Tesla is not a typical company,

Denholm wrote.

Motivating someone like Elon requires something different.

Despite being one of the wealthiest individuals globally, Denholm insisted the vote "is not about the money" but about honoring a commitment made in 2018. She suggested that Musk's numerous ventures, including SpaceX, The Boring Company, Neuralink, X, and xAI, could distract him from Tesla.

Some proxy firms have recommended against the pay package, but early voting indicates strong support, with over 80% of the already cast votes in favor. Musk is also seeking more control over Tesla, aiming for a 25% stake to further his AI and self-driving car projects. He currently holds about 13% of the company.

Denholm's letter concludes with a warning that failing to honor Musk's compensation package could result in his departure, stressing the importance of supporting his vision and recognizing his accomplishments for the continued creation of stockholder value.