Tesla’s board warns investors that rejecting Elon Musk’s massive compensation package could lead to losing him as CEO, jeopardizing Tesla’s AI and robotics future.
Tesla Board Warns Shareholders: Reject Elon Musk’s Compensation Package, Risk Losing CEO
TheInterviewTimes.com | AUSTIN, Texas | October 28, 2025 —The Tesla board warns shareholders that rejecting Elon Musk’s multibillion-dollar compensation plan could jeopardize the company’s leadership at a pivotal time. In a letter to investors, Tesla Chair Robyn Denholm urged support for a new performance-based equity award worth up to $1 trillion, designed to retain Musk’s leadership as Tesla pivots into artificial intelligence and robotics.
Filed with the U.S. Securities and Exchange Commission on October 27, Denholm’s letter highlighted the stakes: “If we fail to foster an environment that motivates Elon to dedicate the time and energy required to achieve Tesla’s ambitious goals, we risk losing his time, talent, and vision.”
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Tesla’s High-Stakes Compensation Plan
The proposed compensation package would reward Elon Musk through stock options tied to aggressive targets — including reaching an $8.5 trillion market capitalization, achieving $400 billion in annual EBITDA, and producing 1 million Optimus humanoid robots.
Currently, Tesla’s market cap is about $1.44 trillion, with 2024 EBITDA at $16.6 billion. The Tesla board warns shareholders that failure to approve the plan could undermine investor confidence and long-term strategy.
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Elon Musk’s Control and AI Vision
While Elon Musk hasn’t directly threatened to quit, he has consistently stressed his need for voting control to steer Tesla’s AI and robotics initiatives without interference from activist shareholders. During Tesla’s Q3 2025 earnings call, Musk remarked, “I’m not comfortable building a robot army and then being ousted by advisory firms that don’t even own Tesla stock.”
This new compensation plan revives the structure of a 2018 performance award, valued then at $56 billion, which was later struck down by a Delaware court in 2024 for governance issues. After reincorporating in Texas, Tesla seeks shareholder ratification under stricter disclosure rules.
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Proxy Firms Oppose, Tesla Board Defends
Two leading proxy advisory firms, ISS and Glass Lewis, have urged investors to vote against the package, citing “excessive dilution” and concerns over governance. ISS warned of up to 20% share dilution, while Glass Lewis criticized the payout size relative to industry peers.
In response, Denholm argued the plan ties Musk’s rewards to shareholder value creation, noting he cannot sell vested shares for 7.5 years, and that investors would benefit early if milestones are reached faster.
Elon Musk’s Stake and Control Ambitions
Currently, Musk owns roughly 15–20% of Tesla’s shares and seeks 25% voting control to protect Tesla’s autonomy-focused mission. The Tesla board warns shareholders that without Musk’s leadership, the company’s progress in autonomous driving, AI, and robotics could slow significantly.
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Upcoming Vote and Market Impact
The shareholder vote on November 6, 2025, will determine whether Musk secures this landmark compensation package. The meeting will be held virtually at 10:00 a.m. Central Time, with results closely watched by Wall Street.
Tesla’s stock has soared 60% year-to-date, driven by optimism over AI-driven growth despite slower EV sales. Analysts caution that rejecting Musk’s pay plan could spark volatility in Tesla’s valuation and shake market confidence.
Disclosure: The author holds no financial position in Tesla Inc.