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By Dan Gooding and Gabe Whisnant
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Tesla Chair Robyn Denholm warned shareholders that CEO Elon Musk could leave the company if his proposed $1 trillion pay package is not approved, saying his leadership is "critical" to Tesla’s future.
The appeal, made in a letter Monday, comes ahead of the November 6 annual meeting as the board faces mounting criticism over governance and its independence from Musk’s influence.
Denholm said the performance-based package is designed to retain and motivate Musk for at least another seven years as Tesla pushes deeper into artificial intelligence and autonomous technology. She cautioned that without proper incentives, the company risks losing Musk’s "time, talent and vision."
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Newsweek reached out to Tesla via email for comment Monday afternoon.
Why It Matters
Musk's continuing leadership is seen as crucial to Tesla's success, but the board at Tesla has come under increasing scrutiny for its alleged lack of distance from him. If shareholders approve the billionaire's new $1 trillion pay package, it would potentially be the largest ever compensation plan awarded to a company chief.
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What To Know
Under the proposal, Musk would be awarded 12 tranches of stock options tied to targets, including delivering on promises for autonomous vehicles, robotics, and an $8.5 trillion market capitulation.
Earlier in October, the Institutional Shareholder Services (ISS) proxy advisory group urged shareholders to reject the package, warning that it could severely limit the Tesla board's ability to adjust payments over the next decade, but the plan did receive a warm welcome in the markets, with stock rising after it was announced.
Denholm said Monday that losing Musk would mean Tesla diminishing its value as a company aiming to be "a transformative force reimagining the fundamental building blocks of mobility, energy and labor."
Musk has been with Tesla since its early days in 2004, and was named CEO in 2008. The electric car company is not his only focus, however, with SpaceX and social media site X also taking up his time.
Tesla in particular experienced a tricky few months earlier in 2025, after Musk took up his role within the Trump administration to lead the Department of Government Efficiency (DOGE). Cars were targeted by protesters angry at his efforts to cut federal government bloat, with Tesla stock seeing dips amid the negative press its leader was getting.
The company's board has also come under scrutiny over its compensation agreements for Musk, with a Delaware court overturning his 2018 pay deal earlier this year, finding it was improperly awarded, and that directors were not fully independent when making their decision.
What People Are Saying
Tesla Chair Robyn Denholm, in a letter to shareholders posted to Tesla's X account: "I feel strongly—as do the rest of my colleagues on our Board—that Elon singularly possesses the leadership characteristics and technical manufacturing know-how to keep us on the path toward maximizing long-term shareholder value as well as social good. We at Tesla are laser focused on exceptional performance—not promises—and we structure our awards in line with this principle."
What's Next
The new payment plan is scheduled for a vote on November 6.
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