In a dramatic turn of events ahead of the upcoming Tesla shareholders meeting, CEO Elon Musk has signaled he may leave the company if his $56 billion pay package is not approved. The revelation came through a letter from Tesla’s chairperson, Robyn Denholm, to shareholders, warning them of the potential consequences of rejecting the compensation deal during the June 13 vote.
In the letter filed with the Securities and Exchange Commission, Denholm emphasized Musk’s unique role at Tesla, stating, “Elon is not a typical executive, and Tesla is not a typical company…So, the typical way in which companies compensate key executives is not going to drive results for Tesla. Motivating someone like Elon requires something different.”
Denholm underscored the importance of the vote, describing it as crucial for the future of Tesla. “These votes are about fairness, respect and the future of Tesla,” she wrote. She highlighted that without proper motivation, Musk might seek opportunities elsewhere. “Nor does he face any shortage of ideas and other places he can make an incredible difference in the world. We want those ideas, that energy, and that time to be at Tesla, for the benefit of you, our owners. But that requires reciprocal respect,” she added.
This upcoming vote marks the second time shareholders will cast their ballots on Musk’s compensation, following a Delaware judge’s decision to void the previous approval due to a “deeply flawed” process. Denholm reiterated that the historic pay package is “obviously not about the money,” noting Musk’s vast personal wealth. “We all know Elon is one of the wealthiest people on the planet, and he would remain so even if Tesla were to renege on the commitment we made in 2018,” she wrote.
Denholm stressed the necessity of retaining Musk’s attention and motivation to drive Tesla’s future success. “If Tesla is to retain Elon’s attention and motivate him to continue to devote his time, energy, ambition and vision to deliver comparable results in the future, we must stand by our deal,” she added.
Amid concerns from some investors about Musk’s focus on Tesla, the CEO’s recent activities add another layer of complexity. Musk, who also operates X, SpaceX, Neuralink, xAI, and the Boring Co., is looking to acquire a 25% interest in Tesla, which would give him greater influence over the company. He has also threatened to spin off Tesla’s AI research into a separate entity if his demands are not met.
As the shareholders’ meeting approaches, the stakes are high for both Musk and Tesla’s future. The decision will undoubtedly have far-reaching implications for the company’s direction and its leadership.