Austin: Tesla shareholders are poised to decide the future of an enormous pay package designed to keep Elon Musk at the helm long enough to achieve promised technological advancements. Musk, who claims Tesla’s capabilities in artificial intelligence, autonomy, and robotics will surpass those of rival tech companies, could receive up to $1 trillion under this unprecedented performance-based package.
According to Bangladesh Sangbad Sangstha, Tesla Chair Robin Denholm has actively advocated for the plan on platforms like CNBC, indicating the board’s strong support for Musk despite criticisms about his political associations possibly affecting sales. Denholm emphasized the risk of Tesla losing significant value without Musk, urging shareholders to consider the company’s transformative goals in mobility, energy, and labor.
Musk has suggested he may leave Tesla or reduce his role if his ownership stake isn’t increased enough to give him the desired influence over the company’s future. The proposed package could elevate Musk’s ownership to over 25 percent from the current 12 percent. Musk remarked that he wants substantial influence over Tesla’s future, particularly in building a “robot army.”
The outcome of the vote will be disclosed at Tesla’s annual shareholder meeting at their Austin factory. Anti-Musk demonstrations are expected outside the gigafactory, following a rally in downtown Austin.
Critics like activist Ethan McBride argue that the package excessively enriches an already wealthy individual, raising concerns about the broader implications for democracy. Musk, with a net worth exceeding $500 billion, is currently the world’s wealthiest person, according to Forbes.
To receive the full pay package, Musk must meet 12 market capitalization milestones, starting with Tesla reaching a $2 trillion market value. The plan also includes operational and product targets, such as delivering 20 million Tesla vehicles, designed to ensure Musk remains with Tesla for at least seven-and-a-half years.
The pay proposal has faced criticism from advisory firms Glass Lewis and Institutional Shareholder Services (ISS), which question the necessity and structure of the package. Norway’s sovereign wealth fund, a major Tesla shareholder, has announced its intention to vote against the package, citing concerns over its size, potential dilution, and the lack of measures to mitigate key person risk.
Supporters like Florida state officials endorse the plan, praising Musk’s track record in creating equity value and labeling the package as the “gold standard for executive compensation.” However, dissenting voices, including New York State Comptroller Thomas DiNapoli, continue to raise concerns about the proposal.