Tesla Chairman Warns Elon Musk May Quit Over Trillion-Dollar Pay Rejection

Tesla Chairman Robyn Denholm has issued a stark warning: CEO Elon Musk could depart the company if shareholders reject his massive, multi-billion-dollar pay package.

The electric vehicle giant is urging its investors to ratify the controversial $56 billion (or approximately $55.8 billion) compensation plan at the upcoming June 2024 annual general meeting. 

This deal, one of the largest corporate compensation packages in history, was initially approved by shareholders in 2018 but was later voided by a Delaware judge in January 2024. 

The judge ruled that the process was flawed and the payout was an "unfathomable sum."

The current campaign to re-approve the package is a direct response to the court ruling. In a recent regulatory filing, Denholm made the company's position clear, stating that Musk's continued commitment to Tesla is directly tied to the pay deal.

"Elon is not a typical executive, and Tesla is not a typical company," Denholm wrote. She emphasized that the plan was designed to incentivize Musk to achieve ambitious growth targets, which he has since dramatically surpassed. She further warned that if the deal is rejected, Musk could choose to "allocate his time and energy" elsewhere, potentially reducing his focus on Tesla.

Shareholders are scheduled to vote on the proposal, which also includes a measure to move the company's legal home from Delaware to Texas, in mid-2024. The outcome will likely be a defining moment for Tesla's leadership and corporate governance.