Elon Musk may step down as CEO if $1 trillion pay package is rejected

Tesla Chairperson Robyn Denholm has warned that Elon Musk could step down as Tesla’s CEO if shareholders do not approve his proposed $1 trillion performance-based pay package. The warning came in a letter sent to shareholders on Monday.

Denholm stated that the performance-linked compensation plan was designed to motivate Musk to continue leading Tesla for at least another seven and a half years.

She emphasized that Musk’s leadership is critical to Tesla’s success, and without proper incentives, the company risks losing his “time, talent, and vision.”

The letter further noted that Musk’s role has become even more vital as Tesla aims to achieve global leadership in Artificial Intelligence (AI) and Autonomous Technology.

Under the proposed package, Musk would receive 12 tranches of stock options, each tied to specific performance targets, including achieving an $8.5 trillion market valuation and major advancements in autonomous vehicles and robotics.

Denholm urged shareholders to approve the package and to re-elect three directors who have long worked alongside Musk.

It is worth noting that a Delaware court had previously nullified Musk’s 2018 compensation package, ruling that it was improperly approved by non-independent directors.