 "Tesla CEO Elon Musk . File image/AFP")
Tesla CEO and billionaire Elon Musk could leave the company “Tesla” if shareholders do not pay a staggering package, board chair Robyn Denholm warned in a letter to voters last week. The package may award Musk about $1 trillion in shares.
Shareholders have a time of until 11:59 pm ET on Wednesday to vote in the favour of the plan which will be then decided in its annual meeting on Thursday.
Musk might leave position
According to the Los Angeles Times, Denholm in his Oct. 27 letter wrote that we must face consequences if the plan does not get fulfilled. He said, “If we fail to foster an environment that motivates Elon to achieve great things through an equitable pay-for-performance plan, we run the risk that he gives up his executive position.”
Tesla may lose his time, talent and vision, which have been essential to delivering extraordinary shareholder returns,” he further added.
The Norges Bank Investment Management, which is Tesla’s biggest investors and manages revenues from Norway’s natural resources said that it will vote against Musk’s plan.
The Bank said, “While we appreciate the significant value created under Mr. Musk’s visionary role, we are concerned about the total size of the award. We will continue to seek constructive dialogue with Tesla on this and other topics.”
Musk already has a lot of profit and is among the high-paid executives, and is Tesla’s largest individual shareholder with almost 13 per cent of shares, but still wishes to take power over the other half of the company.
As Musk expands the new Artificial Intelligence field and introduces new AI bots and humanoid robots, he wants a significant stake in the company.
What the new plan offers
If the new plan is approved, this would give the billionaire about more than 25 per cent stake in the company and meet higher milestones.
The first milestone remains reaching a $2 trillion valuation for Tesla, which is currently valued at around $1.5 trillion.
Apart from the benchmark Tesla has already set, Musk is an important factor to Tesla’s operations and its transition into an artificial intelligence powerhouse, the board of directors said. The proposed pay plan is fair and appropriate because it’s dependent on the company’s overall success and growth, they said as quoted by Los Angeles Times.