The warning comes as Glass Lewis and Institutional Shareholder Companies urge shareholders to vote towards the proposed pay bundle for CEO Elon Musk.
Revealed On 27 Oct 2025
Elon Musk might go away Tesla as CEO if his proposed $1 trillion pay package is just not accepted, Board Chair Robyn Denholm has warned.
The enchantment was despatched in a letter to shareholders of the electrical automotive firm on Monday. It comes forward of Tesla’s November 6 annual assembly, when shareholders are anticipated to vote on the proposed pay bundle, the biggest of its form.
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Tesla’s board has confronted repeated criticism for not performing in shareholders’ greatest pursuits, and governance consultants and advocacy teams have questioned its independence and oversight of Musk’s affect.
The proposed performance-based plan was designed to retain and inspire Musk to proceed main Tesla for a minimum of one other seven and a half years, Denholm mentioned within the letter.
Musk’s management is “crucial” to Tesla’s success, she mentioned, and warned that with no plan that correctly incentivises him, the corporate might lose his “time, expertise and imaginative and prescient”. Musk’s function is significant as Tesla seeks to turn out to be a world chief in synthetic intelligence and autonomous know-how, she mentioned.
The proposed bundle would grant Musk 12 tranches of inventory choices tied to bold targets, together with a market capitalisation of $8.5 trillion and milestones in autonomous driving and robotics.
Denholm’s letter portrays the bundle as essential to align Musk’s incentives with shareholder worth and long-term progress, additionally urging buyers to re-elect three long-serving administrators who’ve labored intently with him.
Tesla’s board has been underneath scrutiny for years over its shut relationship with Musk. A Delaware court docket earlier this 12 months struck down his 2018 pay deal, discovering it was improperly awarded and negotiated by administrators who weren’t absolutely unbiased.
Final week, Proxy agency Glass Lewis and Institutional Shareholder Companies urged shareholders to vote towards the pay bundle. Proxy advisers usually sway main institutional buyers, together with the passive funds that maintain massive stakes in Tesla.
Regardless of the letter, Tesla inventory is on the rise. At 11am in New York (15:00 GMT), it’s up 3.1 %.
