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Jun 12, 2024 378

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

#Global

This is obviously not about the money,’ Tesla’s board chair writes — presumedly with a straight face.

Tesla board chair Robyn Denholm urges shareholders to approve Elon Musk’s $56 billion pay package, warning that failure to do so might drive him away. On June 13th, shareholders will vote again on this compensation, after a Delaware judge voided the initial approval due to flaws in the process. Denholm argues that Musk, due to his unique role and capabilities, requires extraordinary motivation to remain focused on Tesla, especially given his numerous other ventures and the significant impact his departure could have on the company.

Denholm emphasizes that Musk is not a typical executive and requires a different incentive structure to keep him motivated at Tesla. She notes that Musk’s attention could be diverted to other projects where he could make significant contributions if not properly motivated. Despite proxy firms recommending against the package, early voting shows strong support, indicating Musk might get the approval he seeks.

Several proxy firms advise against Musk’s pay proposal, but early voting trends suggest strong support among shareholders. Denholm’s letter underscores the importance of honoring the compensation commitment to maintain Musk’s focus on Tesla’s future, including developments in AI and self-driving technology. Shareholders are cautioned that failing to approve the package might result in Musk channeling his efforts elsewhere.