Tuesday, October 28, 2025 - Elon Musk could step down as CEO of Tesla if his proposed $1 trillion pay package is not approved, according to a recent warning from Tesla Board Chair Robyn Denholm.
The urgent appeal was sent in a letter to shareholders of the
electric car giant on Monday, October 27, ahead of the November 6 annual
meeting where investors are scheduled to vote on the massive, unprecedented pay
proposal.
The warning comes as two major proxy advisory firms, Glass
Lewis and Institutional Shareholder Services, have strongly urged shareholders
to vote against the proposed compensation.
Proxy advisers hold significant sway, particularly with large
institutional and passive fund investors who own substantial stakes in Tesla.
The controversial pay plan is designed to retain and motivate
Musk, encouraging him to lead Tesla for at least another seven and a half
years, Denholm stated in her letter. She emphasized that Musk’s leadership is
“critical” to the company's success, cautioning that without proper incentives,
Tesla risks losing his “time, talent and vision.” This is
especially vital as Tesla seeks to become a global leader in artificial
intelligence and autonomous technology.
The proposed package would grant Musk 12 tranches of stock
options tied to extremely ambitious targets, including a staggering $\$8.5$
trillion market capitalization and major milestones in robotics and autonomous
driving.
Denholm argues the package is necessary to align Musk's
incentives with long-term shareholder value and growth.
Tesla’s board has faced continuous criticism for years, with
governance experts questioning its independence and oversight of Musk’s
influence.
The scrutiny intensified earlier this year when a Delaware
court struck down Musk's 2018 pay deal, finding it was improperly awarded and
negotiated by directors deemed not fully independent.
Despite the boardroom drama and the looming vote, Tesla stock
is on the rise. Shares were up $3.1$ percent in New York trading on Monday.
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