Tesla CEO Robin Denholm calls on the company’s shareholders to approve a $56 billion payout to Elon Musk. On June 13, Tesla shareholders will decide the fate of the compensation package.
This will be the second time that shareholders will vote on Musk’s compensation after a Delaware judge canceled their first decision. earlier this year on the grounds that the approval process was «deeply flawed». Now the company is convincing shareholders to approve the proposal a second time.
«Elon — is not a typical CEO, and Tesla — is not a typical company. So, the typical way companies reward key executives will not work for Tesla. To motivate someone like Elon, you need something different», — Denholm writes in letter to shareholdersfiled with the US Securities and Exchange Commission.
Denholm hints that Musk could have gone to «other places» without the proper motivation:
«What we recognized in 2018 and continue to recognize today is that Elon certainly doesn’t have unlimited time. Nor does he face a lack of ideas and other places where he can make an incredible difference in the world. We want those ideas, that energy, and that time to be [spent] at Tesla for the benefit of you, our owners. But that requires mutual respect».
Denholm’s assertion that Musk needs motivation indicates the board’s fears about the billionaire’s stay at the company. SpaceX, The Boring Company, Neuralink, X, and xAI are taking Musk’s attention away from Tesla, which is the main source of his wealth and popularity.
«We all made a commitment to Elon. Elon has delivered on his commitments and created tremendous value for our shareholders. By reaffirming our commitment to Elon, we demonstrate that we support his vision for Tesla and recognize his extraordinary accomplishments — this is what will motivate him to continue to create value for shareholders».
Early voting suggests that Elon Musk may get what he wants. A report from the eToro trading platform last month showed that holders of about 25% of Tesla shares have already voted. Of these, more than 80% were in favor of the compensation package.
Musk is also seeking to gain more control over Tesla in the form of a 25% stake. He currently owns about 13% of the company — after he sold billions of dollars worth of shares to acquire Twitter. At the X, he expressed his intention to spin off Tesla’s artificial intelligence division into a separate company if his demands are not met.
Source: The Verge