Could Elon Musk leave Tesla as CEO? Company chair warns shareholders
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Tesla CEO Elon Musk Photograph: (AFP)
In a letter to investors, Denholm said that the performance-based plan was designed to keep Musk motivated to continue leading Tesla for at least another seven-and-a-half years.
Billionaire Elon Musk could leave Tesla as CEO if his proposed $1 trillion pay package is rejected by shareholders at the company’s annual meeting on 6 November, Chair Robyn Denholm warned on Monday (Oct 27). This comes amid repeated criticism against the company’s board for not acting in the best interests of its shareholders with governance experts and advocacy groups questioning its independence and oversight of Musk’s influence.
In a letter to investors, Denholm said that the performance-based plan was designed to keep Musk motivated to continue leading Tesla for at least another seven-and-a-half years, Reuters reported.
Denholm said that Musk’s leadership was “critical” to the electric car maker firm’s success. She warned that without a plan that properly incentivises him, Tesla could lose his “time, talent and vision”. Must role was essential as Tesla seeks to expand in artificial intelligence and autonomous technology, she said.
The proposed package would provide Musk 12 blocks of share options if Tesla hits large targets, including a market capitalization of $8.5 trillion and breakthrough in autonomous driving and robotics. If approved, the package would add an additional $900 billion to Musk’s wealth, making him a trillionaire. Currently, Musk has a net worth of more than $400 billion, as per Forbes. However, it is only possible if the value of Tesla stocks increases significantly in the coming years.
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Tesla’s board has been increased scrutiny for years over its close relationship with Musk. Earlier this year, a Delaware court struck down his 2018 pay deal finding it was improperly awarded and negotiated by directors who were not fully independent.
