Tesla CEO Elon Musk could leave if $56 billion pay package not approved

Shareholders will soon decide on a highly controversial $56 billion compensation package for Musk, and Tesla Chair Robyn Denholm has issued a stark warning: if the proposal is rejected, Musk could walk away.

This unprecedented pay package, designed to tie Musk's compensation to Tesla's performance, has already been through the ringer. A Delaware court previously struck down an initial approval due to concerns about Musk's influence over the board. Now, shareholders are facing a critical re-vote.

Denholm argues that Musk is a unique leader whose vision and drive have been instrumental in Tesla's success. "He does not have unlimited time," Denholm said, hinting at Musk's involvement in other ventures like SpaceX and Neuralink. "We want his ideas and energy at Tesla, but that requires mutual respect."

“Elon is not a typical executive, and Tesla is not a typical company,” Denholm writes in a letter to shareholders filed with the Securities and Exchange Commission. “So, the typical way in which companies compensate key executives is not going to drive results for Tesla. Motivating someone like Elon requires something different.”

However, critics argue that the proposed payout is excessive and that Musk's focus might already be divided. Proxy advisory firms have largely recommended against the proposal, highlighting concerns about executive compensation and potential conflicts of interest.

The upcoming vote has become a high-stakes poker game. Shareholders must weigh the potential loss of Musk's leadership against the sheer size of the proposed package. Early voting data suggests a close race, with a significant portion of shareholders yet to cast their ballots.