The chairman of the board of Tesla, Robin Denholm, urges the company's shareholders to approve the $56 billion payout to Elon Musk. On June 13, Tesla shareholders will decide the fate of the compensation package.
This will be the second time shareholders will vote on Musk's compensation after a Delaware judge overturned their initial decision at the beginning of this year on the basis that the approval process was "deeply flawed." Now, the company is urging shareholders to approve the proposal for the second time.
"Elon is not a typical leader, and Tesla is not a typical company. Therefore, the typical way companies reward key management will not bring results for Tesla. To motivate someone like Elon, you need something else," Denholm writes in a letter to shareholders submitted to the US Securities and Exchange Commission.
Denholm hints that Musk could go to "other places" without proper motivation:
"What we recognized in 2018 and continue to recognize today is that Elon certainly has no unlimited time. He also does not lack ideas and other places where he can incredibly change the world. We want these ideas, this energy, and this time to be spent at Tesla for the benefit of you, our owners. But this requires mutual respect."
Denholm's assertion that Musk needs motivation reflects the board's concerns about the billionaire's stay at the company. SpaceX, The Boring Company, Neuralink, X, and xAI distract Musk's attention from Tesla, which is actually his main source of wealth and popularity.
"We have all made commitments to Elon. Elon has fulfilled his commitments and created tremendous value for our shareholders. By confirming our commitment to Elon, we demonstrate that we support his vision for Tesla and recognize his outstanding achievements - this is what will motivate him to continue creating value for shareholders."
The early voting indicates that Elon Musk may get what he wants. eToro's trading platform report for the past month showed that about 25% of Tesla owners have already voted. Of those, over 80% have expressed support for the compensation package.
Musk also seeks to gain more control over Tesla in the form of a 25% stake. Currently, he owns about 13% of the company - after selling billions of dollars' worth of shares to acquire Twitter. On X, he expressed his intention to spin off Tesla's artificial intelligence division into a separate company if his demands are not met.
Source: The Verge
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