Tesla Board Sounds Alarm: Musk Could Exit Without $1 Trillion Compensation Plan

Tesla Chair Robyn Denholm warned shareholders on Monday that Elon Musk may resign as CEO if his $1 trillion compensation package is not approved at the November 6 annual meeting. The plan, structured in 12 performance-based tranches of stock options, requires Tesla to reach an $8.5 trillion market capitalization, deliver 20 million vehicles annually, deploy one million robotaxis, and achieve $400 billion in adjusted core earnings. Denholm stated that Musk’s leadership remains critical to Tesla’s dominance in artificial intelligence, autonomous driving, and robotics, and the award is essential to retain his focus for at least seven-and-a-half years.

The proposal has intensified scrutiny of Tesla’s board independence and governance practices. A Delaware court struck down Musk’s 2018 pay package earlier this year, ruling it was improperly negotiated by directors with close personal and financial ties to the CEO. Proxy advisors Institutional Shareholder Services and Glass Lewis have urged rejection of the new plan, citing its unprecedented scale and limited board flexibility to recalibrate incentives. Advocacy groups like Take Back Tesla argue the award further entrenches Musk’s control without sufficient oversight.

Denholm defended the package by highlighting Musk’s track record in driving Tesla’s valuation from $60 billion in 2018 to over $2 trillion today. She noted that previous shareholder approvals of Musk’s compensation aligned with a 20-fold market cap increase, and the new plan similarly ties rewards to long-term value creation. The letter also calls for re-electing directors Kathleen Wilson-Thompson, James Murdoch, and Kimbal Musk, who have worked closely with the CEO on key initiatives.

Also Read: Elon Musk Defends $1 Trillion Tesla Pay Plan Despite Investor Pushback

The debate unfolds as Tesla accelerates its shift to AI and autonomy amid rising competition from BYD in electric vehicles and Waymo in self-driving technology. Musk has committed to leading Tesla for at least five more years, but his involvement in xAI, SpaceX, Neuralink, and X has fueled concerns about divided attention and succession planning. Rejection of the package could trigger a leadership void at a pivotal moment for Tesla’s technological ambitions.

The upcoming vote will shape Musk’s future at Tesla and set precedents for executive pay and corporate governance in the tech sector. Major institutional investors, including Vanguard and BlackRock, hold decisive sway. With Tesla shares reacting to the controversy, the decision balances the value of Musk’s vision against the need for accountability in one of the world’s most influential companies.

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