The warning comes as Glass Lewis and Institutional Shareholder Services urge shareholders to vote against CEO Elon Musk’s proposed pay package.
Published October 27, 2025
Elon Musk may resign as CEO of Tesla if his proposed $1 trillion pay package is not approved, board chairman Robin Denholm has warned.
The complaint was sent in a letter to the electric car company’s shareholders on Monday. The move comes ahead of Tesla’s annual meeting on Nov. 6, where shareholders are expected to vote on the largest pay package of its kind.
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Tesla’s board has faced repeated criticism for not acting in the best interests of shareholders, with governance experts and advocacy groups questioning its independence and oversight of Mr. Musk’s influence.
Denholm said in the letter that the proposed performance-based plan is aimed at retaining and incentivizing Musk to continue leading Tesla for at least another seven-and-a-half years.
He said Musk’s leadership was “critical” to Tesla’s success and warned that without a plan to properly motivate him, the company could lose Musk’s “time, talent and vision.” Musk’s role will be critical as Tesla aims to become a world leader in artificial intelligence and self-driving technology, he said.
The proposed package would give Musk 12 stock options tied to ambitious goals such as an $8.5 trillion market capitalization and milestones in autonomous driving and robotics.
Denholm’s letter depicts the package as necessary to align Musk’s incentives with shareholder value and long-term growth, and urges investors to re-elect three board members who have worked closely with him for the long term.
Tesla’s board has long been under scrutiny over its close ties to Musk. A Delaware court earlier this year reversed his 2018 salary contract, finding that it was unfairly determined and negotiated by directors who were not fully independent.
Last week, proxy voting firm Glass Lewis & Institutional Shareholder Services called on shareholders to vote against the compensation package. Proxy voting advisors often work with large institutional investors, including passive funds, which own large amounts of Tesla stock.
Despite this letter, Tesla stock is rising. As of 11:00 a.m. (3:00 p.m. Japan time) in New York, the stock is up 3.1%.
