“While it purports to be tied to some very ambitious goals, in fact it gives the board discretion,” said Nell Minow.
Tesla and its shareholders have launched an extraordinary campaign to win approval for a $1 trillion pay package for CEO Elon Musk, arguing it is essential to retain him at a “critical inflection point” for the company defined by advances in artificial intelligence.
Tesla officials made a rare direct appeal to BlackRock, one of its largest institutional investors, while Charles Schwab declared its support after Tesla fans threatened to move their holdings. The company, long resistant to traditional advertising, has also mounted a social media blitz and created a dedicated website urging shareholders to back the proposal ahead of Thursday’s vote.
The package would award Musk stock in 12 tranches tied to market valuation and operational targets, though critics say the board has wide discretion to relax the terms. Opponents, including shareholder groups and corporate governance advocates, say the payout is excessive and risks rewarding distraction as Tesla’s profits decline.
Supporters argue Musk’s leadership has created unparalleled value and that his continued involvement is vital to Tesla’s future. “Do you want to retain Elon as Tesla’s CEO and motivate him to drive Tesla to become the leading provider of autonomous solutions and the most valuable company in the world?” Tesla board chair Robyn Denholm wrote in a letter to shareholders.
Analysts expect the measure to pass, marking a milestone in executive pay. “No matter how you slice it, it’s a lot,” said Rohan Williamson, finance professor at Georgetown University. “So Tesla in that respect is very unique.”
