As Tesla stakeholders vote regarding Elon Musk's new compensation package, valued at nearly $1 trillion, Board Chair Robyn Denholm urges them that if they vote no, he may leave the company behind.
What's happening?
A new compensation package was proposed this month for Tesla's CEO and product architect, in which, given multiple goals are met, he would receive company stock options worth about $1 trillion.
CNBC reported on Denholm's letter, where she wrote: "Without Elon, Tesla could lose significant value, as out company may no longer be valued for what we aim to become." She believes Musk to be the key to the future of the company, especially with its growing focus on robotics and fully self-driving vehicles.
This package would give Musk more than financial gain, though, bringing his stake in the company from 13% to about 25%. Denholm told CNBC that Musk has consistently expressed his desire to have enough influence over Tesla "so that bad things can't happen with the AI" and "so it's less about compensation and more about the voting influence."
While Musk has insisted he doesn't intend to spend the money and it's more about influence, he has not made any commitment to enter into a contractual agreement to maintain some or all of the stock while retained in his role.
Why is this letter important?
With the vote ending on Nov. 5, this letter could have major influence over the outcomes, aiming to convince stakeholders that Musk is critical to avoid being "just another car company."
The letter also stands against opposition made by several groups, including Institutional Shareholder Services, a collection of government officials and investors, and a group of unions and corporate watchdogs.
Some have raised concerns that this pay package could raise prices for consumers, even suggesting the cost increase of Tesla's Premium Connectivity service is to fund Musk's compensation.
If Tesla prices continue to rise, EV ownership could become less accessible, potentially slowing the adoption of these more environmentally friendly vehicles.
What's next for Elon's future with Tesla?
Tesla stakeholders are making their choices now, submitting votes and other proposals by or before 11:59 p.m. ET on Nov. 5.
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Retail traders make up around 30% of this shareholder base, and last year's vote was a record turnout. These individual investors will play a major role in deciding what Musk's pay package, stock, and maybe even his future with the company will look like.
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