Tesla Chair Robyn Denholm has cautioned shareholders that Elon Musk could leave Tesla if his proposed $1 trillion pay plan is rejected, intensifying debate over the company’s leadership and long-term vision.
In a letter to shareholders on Monday, Denholm urged investors to support the massive performance-based compensation package, which she said is vital to keeping Musk “fully engaged” with Tesla as it moves deeper into the fields of autonomous driving, robotics, and artificial intelligence.
“Elon’s time, talent, and vision are critical to Tesla’s success,” Denholm wrote. “Without a compensation plan that properly incentivizes him, we risk losing one of the greatest innovators of our time.”
A Critical Vote Ahead
The warning comes ahead of Tesla’s annual shareholder meeting on November 6, where investors will vote on the proposed package and on the re-election of three long-time board members closely aligned with Musk.
The plan would grant 12 tranches of stock options based on highly ambitious milestones, including Tesla reaching a market capitalization of $8.5 trillion — nearly eight times its current value — as well as major advances in AI, robotics, and autonomous driving technologies.
Denholm described the proposal as a “performance-driven structure” that aligns Musk’s personal incentives with shareholder growth over the next seven-and-a-half years.
Governance Concerns and Legal Backdrop
The appeal to shareholders follows a wave of criticism from corporate governance experts and investor advocacy groups, who argue that Tesla’s board has long struggled to maintain independence from Musk.
Earlier this year, a Delaware court struck down Musk’s 2018 compensation deal, ruling that it was improperly approved by a board that lacked sufficient independence. That pay plan — originally valued at $56 billion — was already the largest in corporate history before the new trillion-dollar proposal.
Denholm’s new letter appears to address that controversy head-on, portraying the updated plan as both transparent and essential to Tesla’s growth strategy.
Tesla’s Future at Stake
The board argues that losing Musk could jeopardize Tesla’s ambitious plans to dominate the electric vehicle, energy, and AI sectors. The company has heavily invested in robotics and neural network technology, aiming to create fully autonomous cars and humanoid robots capable of performing complex labor tasks.
“Musk’s vision is central to our transformation into an AI-driven company,” Denholm emphasized.
Still, critics warn that Musk’s sprawling commitments — including his leadership roles at SpaceX, X (formerly Twitter), Neuralink, and xAI — already stretch his focus thin. Some institutional investors fear that another colossal pay deal may deepen the company’s dependence on a single figure rather than strengthen its governance structure.
Market Reaction
Following the news, Tesla shares rose 1.2% to $226.97 in Monday trading. Analysts say investor sentiment remains divided, with some viewing the package as necessary to keep Musk motivated, while others question whether any individual should command such a vast financial incentive.
The final shareholder vote on November 6 will determine whether Tesla doubles down on its Musk-centric strategy — or risks a leadership shakeup at one of the world’s most influential companies.
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