Elon Musk could quit Tesla if $1 trillion pay deal is rejected – Board Chair warns shareholders

Tesla’s Board Chair, Robyn Denholm, has warned that CEO Elon Musk may step down from his role if shareholders vote against his proposed $1 trillion pay package.

Denholm issued the warning in a letter to investors on Monday, October 27, ahead of the company’s annual general meeting scheduled for November 6, where shareholders will decide on the record-breaking compensation plan.

The statement comes amid mounting opposition from influential proxy advisory firms, Glass Lewis and Institutional Shareholder Services (ISS), both of which have urged shareholders to reject the proposal. These firms hold considerable influence over large institutional and passive fund investors who collectively own major stakes in Tesla.

According to Denholm, the compensation plan is crucial to securing Musk’s continued leadership at a time when Tesla is pursuing ambitious goals in artificial intelligence, robotics, and autonomous driving. She stressed that without the right incentives, the company risks losing Musk’s “time, talent, and vision,” which she described as “critical” to Tesla’s success.

The proposal includes 12 tranches of stock options tied to aggressive performance milestones, including achieving an $8.5 trillion market capitalization — a target that would make Tesla the world’s most valuable company by far.

Denholm defended the plan, saying it aligns Musk’s incentives with long-term shareholder value and growth. However, critics have long questioned the board’s independence and its oversight of Musk’s influence.

Earlier this year, a Delaware court invalidated Musk’s 2018 pay package, ruling that it was improperly structured and negotiated by directors who were not fully independent.

Despite the controversy, Tesla’s stock rose 3.1 percent in New York trading on Monday, reflecting investor optimism ahead of the vote.