Elon Musk has drawn praise and criticism for Tesla’s plan to give him a record-breaking $1 trillion stock package. Robyn Denholm, the chair of Tesla, has vehemently defended the plan, which links Musk’s compensation to nearly unachievable targets that might make him the first trillionaire in history and drive Tesla’s stock to unprecedented heights.
The Unprecedented Pay Package
The proposal by Tesla to give Musk up to 12% of the company’s shares in exchange for him hitting incredible milestones over the next ten years is at the centre of the controversy. Among these are:
- Increasing Tesla’s valuation eightfold to $8.5 trillion.
- Boosting earnings 24-fold from current levels.
- Selling millions more cars and humanoid robots worldwide.
For comparison, Musk would become the first trillionaire in history and Tesla would be firmly established as one of the most valuable corporations in history if it were to meet even half of these goals.
“This isn’t a layup, for sure. “It’s a really ambitious plan,” Denholm told the Financial Times in an interview. “He is entitled to a record-breaking award.”
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Why Musk’s Effort Must Be “Superhuman”
In support of the package’s size, Denholm highlighted Musk’s exceptional capacity to go beyond human boundaries.
She told FT that he would need to invest more time, energy, and effort than most people could in order to reach the aspirational targets we have set.
The package was presented by Denholm as a motivating tool rather than a pay cheque. Nothing will be given to Musk unless he delivers. She stated, “It’s important to note that unless you perform against the milestones, he could get nothing and zero compensation.”
Control, Influence, and Musk’s 25% Demand
In addition to the financial incentives, Musk has publicly declared that in order to safeguard Tesla’s mission—especially as it advances research into artificial intelligence, self-driving cars, and humanoid robots—he needs at least 25% of the company’s equity.
Musk has threatened to leave Tesla entirely if he doesn’t have that much power. “From my perspective, that is a real possibility,” Denholm stated, confirming the existence of this risk. “He has other interests where he could make important contributions to humanity.”
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What Happens If Musk Leaves?
The board of Tesla has threatened dire repercussions if Musk follows through on his vow to quit. Among them:
- Musk’s “singular talent” and vision were lost.
- A probable departure of senior employees.
- A possible decline in the price of Tesla’s stock.
However, Denholm dismissed the notion that Tesla is unsustainable due to its dependence on Musk. “Some of the company’s activities will continue,” she stated. “However, we believe that running Tesla with Elon at the helm is the best way to maximize its future.”
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A History of Scrutiny and Skepticism
The board of Tesla has already come under fire for the way it handles Musk’s position. A Delaware judge invalidated Musk’s 2018 compensation agreement in January, casting doubt on the board’s objectivity. Denholm and her coworkers were characterised as “supine servants of an overweening master” in the verdict.
Denholm has vehemently disagreed with that description. She referred to the charges as “crap” and “absolute BS” in a previous FT interview.
Politics, Protests, and Public Opinion
Musk’s exaggerated ego has permeated politics, and his actions and opinions have caused a rift among Tesla’s clientele. Protests were triggered earlier this year by his involvement in U.S. government policy. Numerous vehicles were vandalised, and some Tesla outlets were picketed.
“Violent protests, especially when they target workers and customers, are not cool in my opinion,” Denholm stated. “Protests are normal in a democracy.”
Denholm maintained that Musk remained involved with Tesla despite his political endeavours. She said, “He works extraordinary hours, to be honest.”
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Shareholder Vote and Political Assurances
On November 6, Tesla shareholders will cast their votes on the proposed package. The business claimed to have received guarantees that Musk’s political participation would “wind down in a timely manner” prior to the vote.
“The words were very carefully chosen and vetted and passed through 47 advisers,” Denholm said when asked if this would have an impact on Musk’s alleged ambitions for a new political party. In reference to the company’s proxy statement, she stated, “So those are the words that we chose.”
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Musk, Free Speech, and Social Media Storms
Musk has frequently made news and occasionally found himself in hot water due to his frequent usage of X (previously Twitter). His posts, according to critics, may harm Tesla’s reputation.
When asked whether the board ever suggests that Musk moderate his tweets, Denholm clarified that although she has “tough conversations” with Musk, she doesn’t go so far as to micromanage his social media activity.
She stated, “I don’t criticise him for every tweet he posts.” One of his and the US’s core values is free expression. In the end, he is a unique person. He has views. He is allowed to express those views.
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The Bigger Picture: Vision vs. Risk
Denholm’s support for Musk essentially amounts to an acknowledgement of his exceptional leadership abilities. She refers to him as a “generational leader” who can accomplish tasks that would be insurmountable for most executives.
However, the plan is quite risky. Trillions of dollars might be made for shareholders if Musk is successful. Tesla may have severe problems if he fails or quits.
Conclusion:
Elon Musk’s $1 trillion payout plan from Tesla encompasses more than just remuneration. It is a risky bet on a leader who has revolutionised sectors while generating controversy at every turn.
In order to secure its position as one of the most powerful corporations in history, Tesla faces a clear gamble: inspire Musk to strive for the impossible. The vote on November 6 will be crucial for shareholders since it will determine whether Tesla will continue to follow Musk’s vision or face the possibility of navigating a future without him.