Billionaire Elon Musk may leave Tesla if shareholders reject his $56 billion pay package, according to the company’s board chair Robyn Denholm. She also stated that the CEO could spend his time in “other places”, as per a report in the Verge.
The shareholders of the electric car maker will decide on Mr Musk’s compensation package on June 13. This will be the second time that shareholders will vote on the CEO’s compensation which was first ruled invalid earlier this year by a Delaware court who claimed that the approval process was “deeply flawed.”
Ms Denholm wrote in the letter to shareholders, filed with the Securities and Exchange Commission, “Elon is not a typical executive, and Tesla is not a typical company. So, the typical way in which companies compensate key executives is not going to drive results for Tesla. Motivating someone like Elon requires something different.”
“What we recognized in 2018 and continue to recognize today is that one thing Elon most certainly does not have is unlimited time. Nor does he face any shortage of ideas and other places he can make an incredible difference in the world. We want those ideas, that energy and that time to be at Tesla, for the benefit of you, our owners. But that requires reciprocal respect,” she continued.
The billionaire’s other ventures including SpaceX, X and xAI, have concerned investors about his ability to focus on Tesla. Ms Denholm insisted that the vote to accept the $56 billion compensation plan is “not about the money,” even if it would make Mr Musk the highest-paid CEO in modern history. “We all know Elon is one of the wealthiest people on the planet, and he would remain so even if Tesla were to renege on the commitment we made in 2018,” she wrote.
The 2018 deal was made in order to “keep Elon focused on Tesla and motivated to achieve the company’s incomparable ambitions,” according to Ms Denholm’s letter. “Upholding our end of the bargain, then, by ratifying the decision we all made in 2018, is more important than ever. If Tesla is to retain Elon’s attention and motivate him to continue to devote his time, energy, ambition and vision to deliver comparable results in the future, we must stand by our deal,” she wrote.
Notably, Mr Musk is looking to acquire a 25 per cent interest in Tesla, which would give him more influence over the company to accomplish his objectives of creating artificial intelligence and self-driving vehicles. He has also threatened to split off Tesla’s AI research into a different company if his demands are not satisfied.
Further, the board chair also urged shareholders to approve moving the company’s base to Texas. Tesla was incorporated in the US state of Delaware, but Mr Musk moved to change its registration to Texas, where the company headquarters are located, as per the Guardian.
