Tesla Chairwoman Robyn Denholm said Elon Musk could leave the company if shareholders vote against the CEO’s $56 billion pay package next week.
In a letter to shareholders and the Securities and Exchange Commission on Wednesday, Ms. Denholm said Mr. Musk’s future at the company is on the line when shareholders vote next week.
“These votes are about fairness, respect and the future of Tesla,” she wrote. “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. This is one of the key reasons the award also requires Elon to hold any shares he receives upon exercise of stock options for five years after he exercises the options — which can only serve to incentivize him to continue delivering value to Tesla and our stockholders.”
Ms. Denholm also implied that if shareholders reject the pay package, Mr. Musk could take his talents elsewhere.
“Nor does he face any shortage of ideas and other places he can make an incredible difference in the world,” she said. “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.”
Mr. Musk also operates X, SpaceX, Neuralink, xAI and the Boring Co.
Ms. Denholm’s letter is the most significant show of support for Mr. Musk’s record pay package ahead of Thursday’s shareholder meeting. This week, shareholder Ron Baron, who owns 4.5 million shares of the electric vehicle company, publicly endorsed the package.
The package has its detractors. Last month, a group of four major Tesla shareholder proxies came out against the plan, parroting the ruling of the Delaware judge who voided the package in January.
The plan was first approved by the Tesla board in 2018 and required the company to meet certain goals before Mr. Musk could retrieve the money. Some shareholders felt the compensation was excessive and sued to block it. The Delaware judge found that Mr. Musk had too much control over the board’s decision.