Elon Musk's future at Tesla Inc. may hinge on a record $1 trillion compensation package that the company's board says is critical to retaining his leadership. In a letter to shareholders released ahead of Tesla's annual meeting, Chair Robyn Denholm made clear that the proposed pay plan is "not just another corporate agenda item," but a decisive measure to keep Musk committed to the company for the next decade.
Denholm warned that rejecting the plan could jeopardize Musk's tenure. The proposal, described by Tesla as a performance-based compensation plan, would grant Musk 12 tranches of stock options tied to aggressive targets, including achieving a market capitalization of $8.5 trillion and major advancements in robotics and autonomous driving.
The board believes Elon's "time, talent, and vision" are crucial to Tesla's future, Denholm said. The plan, she added, is structured to "bind Musk to Tesla for at least another seven and a half years" and align his financial rewards with long-term shareholder value.
The size of the proposed package - an unprecedented $1 trillion - has drawn scrutiny from corporate governance experts, who question whether such an arrangement consolidates too much control in Musk's hands. For shareholders, the choice is stark: approve a deal that could secure Musk's leadership through Tesla's next phase of expansion or risk losing the executive who transformed the company into the world's most valuable automaker.
Earlier this year, a Delaware court invalidated Musk's 2018 pay plan, ruling that Tesla's directors were not sufficiently independent when they approved it. That decision has put added pressure on the board, which is now asking investors not only to ratify the new pay proposal but also to re-elect three directors with close ties to Musk. Critics argue that the arrangement underscores Tesla's long-standing governance challenges.
Musk has hinted publicly that he might focus his efforts elsewhere if the package fails, amplifying investor unease. Analysts say that without Musk, Tesla's identity as a technology-driven company - spanning electric vehicles, AI, and robotics - could face disruption. The proposed deal is designed to reinforce Musk's long-term involvement by tethering his compensation to performance milestones.
Tesla's board has emphasized that the proposed package reflects both ambition and accountability, aiming to align Musk's compensation with performance-based milestones tied to growth in market value, AI, and robotics. The plan, according to Denholm's letter, is meant to demonstrate confidence in Musk's capacity to expand Tesla beyond its identity as an automaker into a broader technology enterprise.
Investors will vote on the measure at Tesla's annual shareholder meeting on November 6. If approved, the company would move forward under Musk's leadership, with a renewed focus on AI, autonomous systems, and energy innovation.
