Tesla’s board chair, Robyn Denholm, has delivered a clear ultimatum to shareholders: approve Elon Musk’s proposed $1 trillion pay package, or risk losing Musk as CEO.
In a letter sent ahead of next week’s annual shareholder meeting, Denholm described Tesla as being at a “critical inflection point,” per Business Insider. Rejecting the plan, she warned, could push Musk to step away from his executive role at the automotive company, potentially derailing Tesla’s focus on boosting autonomous technology and AI.
“The fundamental question for shareholders is simple,” she wrote. “Do you want to retain Elon as Tesla’s CEO and motivate him to drive Tesla to become the leading provider of autonomous solutions and the most valuable company in the world?”
The proposed deal, detailed in an SEC filing last month and previously covered by The Dallas Express, would give Musk roughly 423 million shares—worth more than $1 trillion if Tesla hits an $8.5 trillion valuation by 2035.
The payout depends on a set of ambitious goals: producing 20 million cars a year, launching 1 million robotaxis, and delivering 1 million Optimus humanoid robots to consumers.
Musk would reportedly gain 1% of Tesla’s equity for every $500 billion in added market value, as long as profitability and production targets are met.
If approved, Musk’s ownership stake would rise from 13% to nearly 29%, a move Denholm said reflects his desire for more control, not just more money.
“He’s been very consistent in that view, in terms of having enough influence over the vote of Tesla in the future so that bad things can’t happen with the AI,” Denholm told CNBC. “So it’s less about compensation and more about the voting influence.”
The proposal follows years of pay-related controversy. A Delaware court struck down Musk’s record-setting $56 billion 2018 package earlier this year, citing issues of transparency and board member independence, though shareholders later voted to reinstate it. Tesla’s board also granted him a $29 billion package in August, per Reuters, designed to help keep him on as CEO through 2030.
Now, the new trillion-dollar pay plan faces scattered but steep opposition.
Proxy advisory giants ISS and Glass Lewis urged investors to vote against the proposal, warning of “governance” risks. Musk blasted the firms during last week’s earnings call, calling them “corporate terrorists” and saying he didn’t want to “build a robot army and then be ousted because of some asinine recommendations.”
A small collection of investors has joined the resistance, arguing the deal puts Musk’s interests above shareholders’. In response, Tesla has taken the unusual step of running ads—focused not on cars but on drumming up support for Musk’s potential pay plan.
Regardless, Denholm’s message to stockholders seems stern and clear: Tesla can either secure Musk’s leadership and pursue his AI-driven vision, or risk fading into “just another car company.”
“While there’s nothing wrong with being just another car company,” Denholm wrote, “our board believes Tesla can be more—and that Elon is the right leader to help us reach our full potential.”
Shareholders will cast their votes next week in a decision that could define Tesla’s future, and potentially make Musk the world’s first trillionaire CEO.
If approved, Musk must still overcome those major incentive hurdles to get paid.
“It’s a performance plan; if he doesn’t perform in terms of the milestones, he actually gets nothing…He doesn’t get any salary or any equity unless he actually performs and achieves the milestones that are in the plan,” Denholm added.