Tesla CEO Elon Musk could leave if $56 billion pay package not approved, shareholders warned

Jun 07, 2024 01:41 AM - 5 months ago 61980

Tesla committee chair Robyn Denholm is calling connected nan company’s shareholders to o.k. Elon Musk’s massive $56 cardinal salary package aliases consequence driving nan billionaire CEO to greener pastures.

On June 13th, Tesla shareholders will determine nan destiny of Musk’s compensation package, which is estimated to beryllium worthy arsenic overmuch arsenic $56 billion. It will beryllium the second time that shareholders will ballot connected nan CEO’s pay, after a Delaware judge voided nan first one earlier this twelvemonth connected nan grounds that nan support process was “deeply flawed.” And now nan institution is engaged successful a full-court property to person shareholders to o.k. nan connection a 2nd time.

“Elon is not a emblematic executive, and Tesla is not a emblematic company,” Denholm writes successful a letter to shareholders revenge pinch nan Securities and Exchange Commission. “So, nan emblematic measurement successful which companies compensate cardinal executives is not going to thrust results for Tesla. Motivating personification for illustration Elon requires thing different.”

“Elon is not a emblematic executive, and Tesla is not a emblematic company”

Later, she implies that Musk could decamp to “other places” without due motivation. “What we recognized successful 2018 and proceed to admit coming is that 1 point Elon astir surely does not person is unlimited time,” Denholm says. “Nor does he look immoderate shortage of ideas and different places he tin make an unthinkable quality successful nan world. We want those ideas, that power and that clip to beryllium astatine Tesla, for nan use of you, our owners. But that requires reciprocal respect.”

The ballot to o.k. nan $56 cardinal salary package, which would make Musk nan astir highly compensated main executive successful modern history, is “not astir nan money,” Denholm insists. “We each cognize Elon is 1 of nan wealthiest group connected nan planet, and he would stay truthful moreover if Tesla were to renege connected nan committedness we made successful 2018.”

Denholm implying that Musk needs “motivation” successful nan shape of nan largest salary package ever approved for a CEO successful bid to enactment astatine Tesla speaks to nan fearfulness galore investors consciousness astir his early astatine nan company. Musk’s galore different projects — heading companies for illustration SpaceX, The Boring Company, Neuralink, X, and xAI — have taken his attraction distant from Tesla, which is nan superior root of his wealthiness and popularity.

“We each cognize Elon is 1 of nan wealthiest group connected nan planet”

Several proxy firms person recommended against approving Musk’s salary proposal. But early voting seems to propose that he could extremity up getting what he wants. A study by trading level eToro from past period showed that astir 25 percent of Tesla’s shares person already voted, Reuters said. Of those, much than 80 percent were successful favour of Musk’s package.

Still, Musk is seeking much power complete Tesla, successful nan form of a 25 percent stake, successful bid to execute his goals of processing artificial intelligence and self-driving cars. (He presently holds astir 13 percent of nan institution aft trading billions of dollars of shares to get Twitter.) On X, he has threatened to rotation retired Tesla’s AI activity into a abstracted institution if his demands aren’t met.

And now shareholders are being warned — successful a missive dense pinch innuendo — that he could conscionable time off Tesla if his salary isn’t approved.

“We each made a committedness to Elon,” Denholm writes. “Elon honored his committedness and produced tremendous worth for our stockholders. Honoring our committedness to Elon demonstrates that we support his imagination for Tesla and admit his bonzer accomplishments — this is what will motivate him to proceed to create worth for stockholders.”

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