Tesla Board Chair Robyn Denholm has cautioned that Elon Musk could step down as CEO if shareholders fail to approve his proposed $1 trillion compensation package, according to a letter sent on Monday, October 27.
The warning comes ahead of Tesla’s annual meeting on November 6, where investors are expected to vote on the record-breaking pay plan.
Denholm’s letter follows pushback from two influential proxy advisory firms, Glass Lewis and Institutional Shareholder Services (ISS), both of which have urged shareholders to reject the proposal. These firms wield considerable influence over large institutional and passive fund investors who hold major Tesla stakes.
Denholm defended the proposal, saying it is designed to retain and motivate Musk for at least another seven and a half years. She stressed that his leadership remains “critical to Tesla’s success,” warning that the company could lose his “time, talent and vision” without proper incentives—particularly as Tesla expands its push into artificial intelligence and autonomous driving.
Under the plan, Musk would receive 12 tranches of stock options tied to highly ambitious goals, including achieving an $8.5 trillion market capitalization and reaching key breakthroughs in robotics and autonomous technology.
Denholm argued the deal would align Musk’s interests with long-term shareholder value and growth.
The proposal comes amid ongoing criticism of Tesla’s board, with governance experts questioning its independence and oversight of Musk’s influence. The controversy deepened earlier this year when a Delaware court struck down Musk’s 2018 pay package, ruling it was improperly structured and approved.
Despite the uncertainty, the shares rose 3.1% in New York trading on Monday, reflecting continued investor optimism.
