The warning comes as Glass Lewis and Institutional Shareholder Services urge shareholders to vote against the proposed pay package for CEO Elon Musk.
Published On 27 Oct 2025
Elon Musk could leave Tesla as CEO if his proposed $1 trillion pay package is not approved, Board Chair Robyn Denholm has warned.
The appeal was sent in a letter to shareholders of the electric car company on Monday. It comes ahead of Tesla’s November 6 annual meeting, when shareholders are expected to vote on the proposed pay package, the largest of its kind.
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Tesla’s board has faced repeated criticism for not acting in shareholders’ best interests, and governance experts and advocacy groups have questioned its independence and oversight of Musk’s influence.
The proposed performance-based plan was designed to retain and motivate Musk to continue leading Tesla for at least another seven and a half years, Denholm said in the letter.
Musk’s leadership is “critical” to Tesla’s success, she said, and warned that without a plan that properly incentivises him, the company could lose his “time, talent and vision”. Musk’s role is vital as Tesla seeks to become a global leader in artificial intelligence and autonomous technology, she said.
The proposed package would grant Musk 12 tranches of stock options tied to ambitious targets, including a market capitalisation of $8.5 trillion and milestones in autonomous driving and robotics.
Denholm’s letter portrays the package as necessary to align Musk’s incentives with shareholder value and long-term growth, also urging investors to re-elect three long-serving directors who have worked closely with him.
Tesla’s board has been under scrutiny for years over its close relationship with Musk. A Delaware court earlier this year struck down his 2018 pay deal, finding it was improperly awarded and negotiated by directors who were not fully independent.
Last week, Proxy firm Glass Lewis and Institutional Shareholder Services urged shareholders to vote against the pay package. Proxy advisers often sway major institutional investors, including the passive funds that hold large stakes in Tesla.
Despite the letter, Tesla stock is on the rise. At 11am in New York (15:00 GMT), it is up 3.1 percent.
