Elon Musk may ‘step back’ if shareholders reject $56bn pay package, Tesla chair warns

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The chair of Tesla has raised nan imaginable of Elon Musk stepping backmost from nan electrical carmaker if shareholders do not backmost nan main executive’s $56bn (£44bn) salary package, saying location are “other places” nan entrepreneur could walk his time.

Robyn Denholm added successful a missive to investors that adjacent week’s ballot connected nan biggest remuneration woody successful US firm history was “obviously not astir nan money” because Musk would stay 1 of nan richest group connected nan satellite sloppy of nan outcome.

Denholm said Musk could measurement distant from Tesla, aliases walk little clip astatine nan company, if nan ballot connected 13 June goes against him. Investors approved Musk’s original $56bn (£44bn) salary woody successful 2018 but it was struck down by a judge successful January, forcing nan committee to inquire them to ratify it again.

“What we recognised successful 2018 and proceed to recognise coming is that 1 point Elon astir surely does not person is unlimited time. Nor does he look immoderate shortage of ideas and different places he tin make an unthinkable quality successful nan world,” Denholm wrote. “We want those ideas, that power and that clip to beryllium astatine Tesla, for nan use of you, our owners. But that requires reciprocal respect.”

Musk’s different business interests see rocket institution SpaceX, artificial intelligence startup xAI and X, nan societal media level formerly known arsenic Twitter. Some Tesla investors person expressed interest astir his expertise to attraction connected Tesla. Musk’s behaviour connected X, wherever he has much than 186 cardinal followers, has besides irritated 1 organization investor successful Tesla, Ross Gerber, who said it has “absolutely damaged nan [Tesla] brand”.

Denholm wrote successful nan shareholder letter, dated 5 June, that nan intent of nan 2018 woody was to “keep Elon focused connected Tesla and motivated to execute nan company’s incomparable ambitions”.

“Upholding our extremity of nan bargain, then, by ratifying nan determination we each made successful 2018, is much important than ever. If Tesla is to clasp Elon’s attraction and motivate him to proceed to give his time, energy, ambition and imagination to present comparable results successful nan future, we must guidelines by our deal,” she wrote.

Referring to Musk’s fortune, Denholm added: “This is evidently not astir nan money. We each cognize Elon is 1 of nan wealthiest group connected nan planet, and he would stay truthful moreover if Tesla were to renege connected nan committedness we made successful 2018.”

Denholm said nan package, which included options to bargain Tesla stock, requires Musk to hold 5 years earlier trading shares that he receives successful nan deal.

Musk’s luck stands astatine $203bn, according to Bloomberg, making him nan world’s 3rd wealthiest person.

Last month, ISS, a apical proxy advisory firm, recommended shareholders ballot against nan package, calling nan compensation excessive. Glass Lewis, different advisory firm, has recommended a ballot against. Bailie Gifford, a top-15 investor successful Tesla, has said it plans to backmost nan package, while Calpers, nan US nationalist pension money and a top-25 shareholder, has said it plans to ballot against.

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Musk owns astir 13% of Tesla but nan connection to shareholders earlier nan AGM indicates that nan billionaire’s liking will not count towards nan vote, saying nan ballot must beryllium a majority of Tesla stock “not owned, straight aliases indirectly, by Mr Musk” aliases his relative Kimbal.

Denholm besides asked shareholders to o.k. moving nan company’s ineligible guidelines to Texas. Tesla is incorporated successful nan US authorities of Delaware but Musk moved instantly to move its registration to Texas, wherever its office are based.

“Being incorporated successful Texas provides nan champion level for Tesla to turn and innovate because we judge that Texas legislators and courts are successful nan champion position to reasonably create and make decisions astir firm rule that applies to Tesla, particularly erstwhile our adjacent large stake pays disconnected beyond anyone’s wildest expectations,” wrote Denholm.

Dan Ives, an expert astatine nan US stockbroker Wedbush Securities, said Musk was “not going anywhere” but could driblet his main executive title and go little progressive successful Tesla if nan ballot goes against him.

“Musk is not going anyplace but if nan comp package is denied he will perchance shed his CEO title and go little progressive successful Tesla complete time,” said Ives.

Source theguardian