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Tesla shareholders will decide this week whether Elon Musk is worth a trillion dollars. Suggested Reading Investors will vote Thursday on a proposal to grant the world’s richest person a pay package that would be the largest ever awarded to a chief executive. The 10-year deal would guarantee Musk about $1 trillion in stock awards if the EV maker hits a market value of $8.5 trillion — six times its current size. Other benchmarks for Musk to meet would include deploying one million humanlike robots and launching a fleet of one million self-driving robotaxis. Related Content Those goals are lofty, but the plan would also allow the board to give Musk a portion of the shares if he comes up short. Corporate governance experts told The New York Times the board could even award him shares regardless of performance. The fact that Tesla’s board includes Elon’s younger brother, Kimbal Musk, can only add to concerns over its independence. The shareholder vote has been called an “inflection point” for the company by Tesla board chair Robyn Denholm. She said in a letter last week that rejecting the plan would “fail to foster an environment that motivates Elon to achieve great things” — and that he might leave Tesla as a result. That could cost Tesla “significant value,” she added. Musk’s “time, talent and vision… have been essential to delivering extraordinary shareholder returns,” Denholm said. Critics don’t see it that way. New York State Comptroller Thomas DiNapoli wrote last month that the plan shows an “alarming lack of independence” on the board’s behalf. The state’s retirement fund holds about $1.7 billion in shares. “The idea that another massive equity award will somehow refocus a man who is distracted is both illogical and contrary to the evidence,” he said. Read more: Tesla offers a trillion-dollar leash to keep Elon Musk focused Even the Pope Leo has come out against the package. Referring to it as an example of growing wealth inequality, the pontiff said in September: “What does that mean and what’s that about? If that is the only thing that has value anymore, then we’re in big trouble.” Proxy firms ISS and Glass Lewis advised investors to reject the plan, prompting Musk to brand them “corporate terrorists” and say they have “no freaking clue” on the company’s most recent earnings call. He added: “I just think that there needs to be enough voting control to give a strong influence, but not so much that I can't be fired if I go insane.” Musk’s far-right views and political interventions have heightened concerns about him getting distracted to that point that a group of top shareholder in May urged the board to require Musk to spend at least 40 hours a week on Tesla business. In October, Yale researchers found his recent “polarizing and partisan” actions may have cost the electric vehicle maker more than 1 million U.S. car sales. Deliveries of Tesla's vehicles are set to decline for a second year in a row despite an expanding market for EVs globally. That is partly due to competition from China’s BYD, which, thanks in large part to its more affordable models, overtook Tesla last year as the world’s biggest electric carmaker. Back in 2011, Musk mockingly asked about BYD: “Have you seen their car?” Many investors, including Ark Invest’s Cathie Wood, are still bullish. They put much of Tesla’s value down to Musk’s predictions of a future of self-driving cars and a “robot army.” In her plea in October, board chair Denholm said: “While there may be nothing wrong with being just another car company, our Board believes that Tesla can be more, that our shareholders deserve more, and that Elon is the right leader to help us achieve our full potential.” “The biggest asset for Tesla is Musk,” wrote Dan Ives, an analyst at Wedbush Securities, in a recent note. “With the AI Revolution this is a crucial time for Tesla ahead with autonomous and robotics front and center.” He added that the pay deal is “critical to keep Musk at the helm to lead Tesla through the most critical time in the company’s history.” Musk has previously said the only thing that would stop him from leading Tesla in five years is his own death. That is, of course, unless the world’s richest man doesn’t get his pay check. 📬 Sign up for the Daily Brief
