Tesla Shareholders Face Pivotal Vote on Musk’s $56B Pay Deal
Tesla shareholders are weighing a historic decision as they vote on whether to reinstate Elon Musk’s $56 billion compensation package—a move some warn could prompt the CEO to depart if rejected. The pay plan, originally approved in 2018 but overturned by a Delaware court in January 2024, has reignited debates over corporate governance and Tesla’s reliance on Musk.
Why the Pay Package Matters
The performance-based award, worth up to $1 trillion if all milestones are met, grants Musk stock options only if Tesla achieves unprecedented growth in market cap and revenue. Proponents argue it aligns Musk’s incentives with shareholders, while critics decry it as excessive amid Tesla’s slowing EV sales and rising competition.
Key Concerns:
– Delaware Court Ruling: Judge voided the 2018 approval, citing flawed oversight by Tesla’s board.
– Board’s Defense: Directors claim the package is vital to retain Musk, calling him “irreplaceable.”
Musk’s Threat to Reduce Tesla Involvement
Tesla Chair Robyn Denholm warned in filings that rejecting the plan could lead Musk to prioritize his other ventures (SpaceX, xAI, Neuralink). Musk himself hinted at shifting focus, stating he’s “uncomfortable” growing Tesla’s AI/robotics without 25% voting control.
Investors at Odds Over Mega-Payout
- Against: Proxy advisors Glass Lewis and ISS label the package “excessive,” noting Tesla’s stock slump since 2021.
- For: Retail investors and Musk loyalists argue his leadership is critical for innovation.
Potential Fallout If Musk Exits
Analysts predict a 30–50% stock drop if Musk scales back involvement, citing Tesla’s lack of a clear successor. Critics counter that the company must prove it can outgrow its founder.
June 13 Vote: A Loyalty Litmus Test
With Tesla’s board campaigning aggressively (including VoteTesla.com), the decision hinges on whether shareholders view Musk as an asset or a liability. Musk’s recent social media quip—“If I’m not wanted, plenty of other places will happily take me”—adds to the drama.
The Bottom Line
The vote isn’t just about pay—it’s a referendum on Tesla’s identity. Upholding the package could cement Musk’s dominance; rejecting it may force Tesla to reinvent itself.
— NextMinuteNews
