Elon Musk may leave Tesla if shareholders do not vote through his $US1 trillion ($1.5 trillion) pay package, the company’s chairman has warned.
Robyn Denholm stressed that Tesla was at a “critical inflection point” ahead of a vote to approve the co-founder’s pay plan next week, which could make him the first trillionaire in history.
Musk’s pay has long been a source of controversy at Tesla. He does not receive a salary or bonus but is instead rewarded through tailor-made pay schemes.Credit: AP
In an open letter, she wrote: “If we fail to foster an environment that motivates Elon to achieve great things through an equitable pay-for-performance plan, we run the risk that he gives up his executive position, and Tesla may lose his time, talent and vision, which have been essential to delivering extraordinary shareholder returns.
“Without Elon, Tesla could lose significant value, as our company may no longer be valued for what we aim to become.”
Tesla last month unveiled a new pay award scheme that would hand its chief executive $US1 trillion if he succeeds in hitting a string of ambitious targets, including increasing the company’s valuation from $US1 trillion to $US8.5 trillion over the next decade.
Other goals include selling one million AI robots and deploying one million self-driving robotaxis on the road by 2035.
However, the proposed pay packet has been met with opposition from shareholder advisory groups Glass Lewis and ISS, which both urged investors to vote against it.
Glass Lewis warned that the plans should “warrant significant concern” as they would dilute other shareholders’ stakes while potentially handing Musk a “materially increased ownership stake”.
