Tesla's board chair, Robyn Denholm, has urged shareholders to approve Elon Musk's proposed $56 million compensation package, cautioning that failing to do so might result in losing him as Tesla's (TSLA) CEO.
"Elon is not a typical executive, and Tesla is not a typical company," Denholm explained in a communication to shareholders. "Traditional executive compensation models won't drive results for Tesla. Motivating someone like Elon requires a different approach."
The shareholder vote to approve the compensation package is scheduled for the company's Annual Shareholder Meeting on June 13. Notably, Chancellor Kathaleen McCormick previously invalidated the package, deeming it "deeply flawed" due to Musk's significant influence on the Board.
"Since 2018, we have understood that Elon’s time is extremely limited," Denholm noted. "He has an abundance of ideas and numerous opportunities to make a global impact elsewhere. We want his ideas, energy, and time focused on Tesla, benefiting our shareholders. This necessitates mutual respect."
In January, Musk took to X/Twitter, seeking a 25% voting share in the company or threatening to pursue AI and robotics ventures independently of Tesla.
Reportedly, Musk plans to establish a supercomputer gigafactory for xAI in Memphis, alongside developing an AI program known as Grok.
"We all committed to supporting Elon," Denholm stated. "Elon has honored his commitment, delivering substantial value to our stockholders. Keeping our promise to Elon shows that we back his vision for Tesla and acknowledge his remarkable achievements—this will motivate him to keep driving value for our shareholders."
Additionally, Denholm encouraged shareholders to approve the proposal to reincorporate Tesla in Texas from Delaware. "Texas offers stockholders governance rights similar to Delaware's, while providing greater certainty for the innovative, high-stakes decisions that define Tesla," she concluded.
