Elon Musk's future at Tesla may hang in the (very expensive) balance
The iconic electric vehicle's board must convince shareholders it's worth awarding their tech titan CEO a $50 billion pay compensation package — or he might walk


Depending on which way the fickle finger at the end of Adam Smith's infamous "invisible hand" is pointing on any given day, tech titan Elon Musk is one of — if not the — richest men in the history of the human race. Whether through the rockets and satellites of his SpaceX company, his moderation of global conversations on X, formerly Twitter, or his legion of devoted Tesla drivers, Musk unilaterally wields influence formerly reserved for kings and nation-states. At the same time, his erratic and occasionally bigoted behavior has created significant turbulence for his various companies, threatening both their corporate reputations and financial bottom lines. Nevertheless, with a net worth upwards of $200 billion dollars, Musk remains perhaps the most potent force in the business world, and one of the most potent in the world at large.
Next Thursday, Tesla shareholders will vote on whether to award their CEO a compensation package worth approximately $50 billion dollars, six months after Delaware Chancery Court Chancellor Kathaleen McCormick blocked an earlier iteration of the deal. Initially negotiated in 2018, the gargantuan bonus is based on Tesla having achieved certain milestones under Musk's leadership, and would nearly double his equity share in the company from 13% to 22% — if, that is, it's approved next week.
'This is obviously not about the money'
Next week's vote is "one of the most important … in the history of our extraordinary company," Tesla Board Chair Robyn Denholm said in a letter to shareholders. To approve the compensation package is to "honor the collective commitment we made to Elon" in the service of "retaining Elon's attention and motivating him to focus on achieving astonishing growth for our company." Regardless of whether the package is approved, Musk would remain one of the wealthiest people on Earth, so "this is obviously not about the money," Denholm said. But if not money, what?
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Upping his ownership in Tesla would bring his equity "close to the 25% voting rights threshold Musk has floated to fully develop artificial intelligence at the company," Forbes said. Already, Musk has diverted AI processors "earmarked for the EV giant" to his other artificial intelligence projects at X, Investors.com said. If he does not achieve his 25% voting rights milestone, shareholders should expect Tesla to "significantly slow down/curtail its direct investment in sensitive/advanced AI efforts" and instead expect them to be "concentrated within non-Tesla entities where Elon Musk has control," Morgan Stanley analyst Adam Jones said this week.
Ultimately, for as much as the "'will they or won't they' question has preoccupied the minds of investors," Barron's said, "the vote will likely be yes."
'Threats ring somewhat hollow'
Musk's proposed compensation package is "disproportionate in every way," The Wall Street Journal's Stephen Wilmot said. Not only would shareholders "pay for it through the dilution of their holdings," but Denholm and the Tesla board's efforts to "whip up support for Musk's pay" have become a "spectacle" which "highlights the corporate-governance problem" that fueled the Delaware Chancery Court's decision to nix the deal earlier this year. "With Tesla's board under Musk's thumb," Wilmot said, "shareholders have nobody to look after their interests but themselves."
Tesla should "install [a] new board of directors," Leo Koguan, one of Tesla's largest individual shareholders, said to Barron's. The board should also require the CEO "to spend [his] full time for Tesla," said Koguan, who claims to own more than 27 million shares of the company. Describing Musk as a "tyrant CEO," Koguan has already voted against the compensation package, Forbes said. "Influential proxy advisers Institutional Shareholder Services and Glass Lewis have both urged investors to vote against the 'excessive' and 'outsized' pay award," Financial Times said.
"The threats" of Musk abandoning Tesla should his package not be instated "ring somewhat hollow," the Journal said. Tesla still represents a "large proportion of his net wealth," meaning "Musk couldn't easily jump ship." Instead, think of next week's vote as "no more than a tactic" to challenge the Chancery Court's earlier ruling. Moreover, even if Musk's bonus is approved, it still "doesn't fully eliminate the threat of Musk's distraction arising from other business interests," Barron's said.
"Elon is not a typical executive," Denholm wrote in her letter to shareholders. One way or another, she is absolutely right.
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Rafi Schwartz has worked as a politics writer at The Week since 2022, where he covers elections, Congress and the White House. He was previously a contributing writer with Mic focusing largely on politics, a senior writer with Splinter News, a staff writer for Fusion's news lab, and the managing editor of Heeb Magazine, a Jewish life and culture publication. Rafi's work has appeared in Rolling Stone, GOOD and The Forward, among others.
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