Tesla Board Warns Musk May Leave if Pay Package Not Approved

Which should surprise no one

When Delaware invalidated the stockholder approved pay package for Elon Musk earlier this year, which when approved with its milestones most of the media laughed at as unachievable, that meant Musk has not received a penny of compensation from Tesla since 2018. I think anyone would be pissed at that.

So Tesla has put the same package to vote to shareholders and its Board is stressing its importance of being approved. It was not directly insinuated until today, but the Chairman of Tesla’s board wrote a letter to shareholders that if Musk’s new package is not approved, he will likely leave Tesla.

What we recognized in 2018 and continue to recognize today is that one thing Elon most certainly does not have is unlimited time,” Denholm says. “Nor does he face any shortage of ideas and other places he can make an incredible difference in the world. 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.

There is a lot of back and forth all over the internet about whether this package will be approved as it is certainly massive and would dilute current shareholders. Many shareholders are also disappointed in Tesla’s stock performance recently, although that is part of a greater pullback on electric cars amidst fierce competition from China.

Personally, I think a Delaware judge interfering with shareholder approved compensation plans is obscene and the idea Musk should not be compensated for all the success Tesla has had since 2018 is absurd. Furthermore, I firmly believe he will leave if his pay package is not approved, which would cause Tesla’s stock to crash. Musk seems to have little care for others when they try to manipulate him (see the Disney GFY speech). He certainly seems more focused on his other companies and my guess is he finds them more interesting, especially Twitter and xAI. He’s also known to not particularly care about money besides using shares as a method of owning or controlling companies. I believe if his shares in Tesla are not granted, he will not feel he was compensated properly for achieving all the milestones set out in 2018, which again, were called farcical when they were proposed.

I’m rather indifferent to whether the package is approved. I think SpaceX, Twitter, and xAI are more important companies than Tesla and more deserving of Musk’s time and energy. I get the feeling he feels similarly.

We’ll see what happens.