### Elon Musk and the $56 Billion Compensation Package: A Decisive Vote for Tesla’s Future
Robyn Denholm, chairman of Tesla’s board of directors, recently appealed to the company’s shareholders to approve the massive $56 billion pay package for Elon Musk. Otherwise, says Denholm, there is a risk of pushing the billionaire CEO towards other shores. On June 13, Tesla shareholders will decide the fate of Musk’s compensation package, which could be worth up to $56 billion. This will be the second time shareholders have voted on CEO pay, after a Delaware judge overturned the first vote earlier this year, finding the approval process was “deeply flawed.” Now the company is doing everything to convince shareholders to approve the proposal again.
“Elon is not a typical executive, and Tesla is not a typical company,” Denholm writes in a letter to shareholders filed with the Securities and Exchange Commission. “So, the typical way companies compensate key executives won’t deliver results for Tesla. Motivating someone like Elon requires something different.” Denholm also suggests that Musk could move elsewhere without adequate incentive. “What we knew in 2018 and continue to know today is that one thing Elon certainly doesn’t have is unlimited time,” Denholm says. “He has no shortage of ideas and places where he can make a difference in the world. We want those ideas, that energy and that time to be dedicated to Tesla, for the benefit of you, our owners. But that requires mutual respect.”
The vote to approve the $56 billion pay package, which would make Musk the highest-paid CEO in modern history, “isn’t about money,” Denholm insists. “We all know that Elon is one of the richest people on the planet, and he would remain so even if Tesla fails to meet its commitment in 2018.” The concern of many investors regarding Musk’s future at Tesla is evident. His numerous projects (SpaceX, The Boring Company, Neuralink, X and xAI) have diverted his attention from Tesla, which is the main source of his wealth and popularity. Several advisory bodies have recommended not approving Musk’s compensation proposal. However, early votes seem to suggest that he might get what he wants. A report from trading platform eToro last month showed that around 25% of Tesla stock holders have already voted, and among them, more than 80% were in favor of Musk’s package.
Musk is seeking more control over Tesla, in the form of a 25% stake, to achieve his goals of developing artificial intelligence and self-driving cars. He currently holds about 13% of the company after selling billions of dollars of stock to acquire Twitter. On X, he threatened to spin off Tesla’s AI work into a separate company if his demands aren’t met. “We all made a commitment to Elon,” Denholm writes. “Elon has honored his commitment and delivered tremendous value for our shareholders. Honoring our commitment to Elon shows that we support his vision for Tesla and recognize his extraordinary achievements. This is what will motivate him to continue creating value for the shareholders”.
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