Tesla Board Chair Robyn Denholm just escalated the stakes around CEO Elon Musk's controversial $1 trillion pay package, warning shareholders that rejecting it could cost the company its visionary leader. With the vote closing November 5th and proxy advisors already pushing back, Tesla's betting its AI future on keeping Musk in the driver's seat as it pivots from automaker to robotics powerhouse.
Tesla just turned its shareholder vote into an ultimatum. Board Chair Robyn Denholm dropped a bombshell Monday morning, essentially telling investors they need to approve Elon Musk's nearly $1 trillion pay package or risk losing him entirely. "Without Elon, Tesla could lose significant value, as our company may no longer be valued for what we aim to become," Denholm wrote in her letter to shareholders, according to CNBC. The timing couldn't be more dramatic - with voting closing at 11:59 PM ET on November 5th, just one day before Tesla's annual meeting. This isn't just about money anymore. Denholm made it crystal clear during her appearance on CNBC's "Squawk Box" that Tesla sees itself at a critical inflection point, pivoting hard into artificial intelligence territory. "The opportunity for Tesla in the future, given this AI focus and attention and the unique capabilities that we have as an organization, and that Elon brings to us, really does mean that the opportunity for the company ahead of us is significant," she explained. The proposed compensation plan reads like something from a sci-fi novel. It consists of 12 tranches of shares that Musk would receive if Tesla hits specific milestones outlined in SEC filings. But here's the kicker - it's not really about the money. The package would catapult Musk's ownership from his current 13% stake to roughly 25%, giving him the voting control he's been demanding publicly for over a year. Musk made his position abundantly clear during Tesla's recent earnings call when discussing the company's Optimus robot program: "If we build this robot army, do I have at least a strong influence over that robot army? I don't feel comfortable building that robot army if I don't have at least a strong influence." The resistance is mounting fast. Proxy advisory firm Institutional Shareholder Services has already recommended against the package, while a coalition of unions and corporate watchdogs launched the Take Back Tesla website to mobilize opposition. Their argument focuses on Musk's increasing embrace of right-wing political movements and conspiracy theories, which they claim have damaged Tesla's brand value. But Tesla's betting everything on its AI transformation story. The company just reported third-quarter results that missed earnings expectations but showed a 12% revenue increase after two straight quarters of declines. More importantly, Denholm emphasized that Tesla is moving "beyond being just another car company" with its focus on Full Self Driving technology and the Optimus humanoid robot program. The shareholder dynamics make this vote particularly unpredictable. Denholm noted that retail investors make up about 30% of Tesla's shareholder base - a unusually high proportion that could swing either way. Last year's vote saw record turnout, and all eyes are on whether individual investors will side with institutional opposition or stick with Musk despite the controversies. "He's been very consistent in that view, in terms of having enough influence over the vote of Tesla in the future so that bad things can't happen with the AI," Denholm told CNBC, framing the entire package as essential for AI governance rather than simple compensation. Tesla's stock has been volatile amid the uncertainty, and the company's market valuation hangs in the balance of this vote.
