Musk threatens to quit if $1 trillion pay plan isn’t approved
The board puts Tesla’s future on the line: without approval of the $1 trillion pay package, Elon Musk may leave, threatening the firm’s AI and robotaxi ambitions.
CULTURE
Tesla finds itself at a pivotal crossroads as its board urges shareholders to approve a roughly $1 trillion compensation package for Elon Musk. The plan, disclosed in a filing with the SEC, outlines twelve stock tranches tied to ambitious targets: reaching a market capitalization of $8.5 trillion, delivering 20 million vehicles, and rolling out robotaxis and artificial‑intelligence robots over the coming decade. If all milestones are met, Musk’s ownership would rise from about 13 % to nearly 25 % of the company, cementing his voting power within the group.
Board chair Robyn Denholm warned investors that failing to reach an agreement could trigger the CEO’s departure. In a letter to shareholders ahead of the November 6 annual meeting, she emphasized that Elon’s “time, talent and vision” are essential to Tesla’s strategy, especially in artificial‑intelligence, autonomous driving and robotics. She added that without a long‑term incentive, the automaker risks losing “significant value” and seeing its share price decline further.
Corporate‑governance critics have long highlighted the close ties between the board and Musk, accusing the company of lacking independence. The proposed compensation, which would dwarf the previous record $56 billion award granted in 2018, raises concerns about protecting the interests of smaller shareholders. Analysts note that achieving the objectives—particularly multiplying the market cap eightfold—relies on very optimistic growth assumptions, while vehicle sales have recently shown signs of slowing.
For institutional investors, the decision represents a bet on Musk’s ability to turn AI and robotaxi projects into tangible revenue. If the plan is approved, Tesla would gain an additional lever to retain its iconic leader and continue its global expansion. Conversely, a rejection could spark a difficult negotiation, possibly prompting Musk to focus more on SpaceX, X or other ventures, weakening the automotive division’s momentum.
Ultimately, the vote scheduled for November 6 is a critical moment for Tesla’s governance. The outcome will determine not only the company’s financial future but also the stability of its leadership at a time when competition is intensifying and regulators are scrutinizing executive‑pay practices closely.
Sources:
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