Will Elon Musk leave Tesla as CEO? Chair Robyn Denholm warns shareholders if his $1 trillion pay package is rejected

Elon Musk could leave Tesla, the company that made him the richest person on earth, if shareholders did not approve of his $1 trillion pay package.

In a letter to shareholders on Monday, Chair Robyn Denholm warned that advisory firms continue to ask them not to approve Elon Musk's $1 trillion pay package at Tesla.

The appeal comes days ahead of the EV maker's annual meeting on 6 November, even as the Tesla board reportedly faces backlash for not acting in shareholders' best interests.

Governance experts and advocacy groups have questioned the Tesla board over its independence and oversight of Musk's influence.

What did Tesla tell its shareholders?

In his letter to shareholders Robyn Denholm said that the proposed performance-based plan, which would ensure a $1 trillion salary to Musk, was designed to retain and motivate the Tesla CEO to lead his company for at least the next 7.5 years.

The leadership of Elon Musk was ‘critical’ to ensure Tesla's success, she said.

The Tesla Chair further warned that the company could lose Musk's “time, talent and vision” if it fails to have a plan to properly incentivise him, adding that the CEO's role was crucial as the EV maker seeks to become a global leader in artificial intelligence and autonomous technology.

The proposed package would grant Musk 12 tranches of stock options tied to ambitious targets, including a market capitalisation of $8.5 trillion and milestones in autonomous driving and robotics.

Denholm's letter portrays the $1 trillion package as important to align Musk's incentives with shareholder value and long-term growth, also urging investors to re-elect three long-serving directors who have worked closely with him.

Musk urges Tesla shareholders to approve his $1 trillion pay

Last week, Elon Musk hijacked the earnings call of Tesla to appeal to shareholders for approving his $1 trillion pay package.

He also lashed out at shareholder advisory firms that have come out against the proposal.

“There needs to be enough voting control to give a strong influence, but not not so much that I can’t be fired if I go insane,” Musk said while interrupting his CFO as the long earnings call was about to get wrapped up.

For years, the board of Tesla has been under public scrutiny for its close relationship with Elon Musk.

A Delaware court earlier this year struck down his 2018 pay deal, finding it was improperly awarded and negotiated by directors who were not fully independent.