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Tesla’s Future Hinges on Shareholder Vote: Elon Musk’s Role at Stake

The chair of Tesla has raised the prospect of Elon Musk stepping back from the electric carmaker if shareholders do not support the chief executive’s $56 billion pay package, highlighting the numerous opportunities where the entrepreneur could invest his time and energy.

Robyn Denholm, Tesla’s chair, addressed investors in a letter, emphasizing that the upcoming vote on June 13th regarding the largest remuneration deal in US corporate history is “obviously not about the money” since Musk would remain among the richest individuals globally regardless of the outcome.

The Stakes of the Upcoming Vote

Denholm noted that Musk could step away from Tesla or reduce his involvement if the vote goes against him. Originally approved by investors in 2018, Musk’s $56 billion pay deal was invalidated by a judge in January, necessitating another vote for ratification.

Denholm emphasized the importance of Musk’s involvement, stating, “We want those ideas, that energy and that time to be at Tesla, for the benefit of you, our owners. But that requires reciprocal respect.” Musk’s other business ventures include SpaceX, artificial intelligence startup xAI, and the social media platform X. Some Tesla investors are concerned about his ability to remain focused on Tesla, especially given his high-profile activities on X, which one institutional investor, Ross Gerber, claimed have “absolutely damaged the [Tesla] brand.”

Ensuring Musk’s Commitment

The 2018 pay package was designed to keep Musk focused on Tesla’s ambitious goals. Denholm stressed that ratifying this deal is crucial to retain Musk’s attention and drive the company’s future success. “Upholding our end of the bargain by ratifying the decision we made in 2018 is more important than ever,” she wrote.

Denholm added that Musk’s fortune, currently at $203 billion according to Bloomberg, makes this issue not about financial gain. The package, including stock options, requires Musk to wait five years before selling the shares received in the deal.

Mixed Reactions from Shareholders

The pay package has faced criticism from top proxy advisory firms ISS and Glass Lewis, who labeled the compensation as excessive and recommended voting against it. However, significant investors like Bailie Gifford support the package, while Calpers, a major US public pension fund, plans to vote against it.

Musk owns approximately 13% of Tesla, but his and his brother Kimbal’s shares will not count towards the vote, which must be decided by a majority of Tesla stockholders excluding the Musk family.

Potential Changes Ahead

Denholm also urged shareholders to approve moving Tesla’s legal base to Texas. Although Tesla is currently incorporated in Delaware, Musk aims to re-register the company in Texas, aligning with its headquarters location. “Being incorporated in Texas provides the best platform for Tesla to grow and innovate,” Denholm argued.

Dan Ives, an analyst at Wedbush Securities, suggested that while Musk is unlikely to leave Tesla entirely, he could relinquish his CEO title and become less involved if the pay package is denied. “Musk is not going anywhere but if the comp package is denied he will potentially shed his CEO title and become less involved in Tesla over time,” said Ives.


The upcoming shareholder vote is pivotal for Tesla’s future, determining not only the approval of Musk’s compensation package but also his level of involvement with the company. As Tesla navigates these potential changes, the outcome of this vote will significantly impact its strategic direction and leadership dynamics.

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