Electric car maker Tesla CEO Robin Denholm called on shareholders to paid a $56 billion compensation package to company founder Elon Musk to avoid his departure. This is stated in Denholm's letter sent to the US Securities and Exchange Commission.
„In 2018, we came to a conclusion that we are receiving confirmation of today, namely that Elon definitely does not have an unlimited supply of time”, the letter notes. Denholm pointed out that the payment assigned to Musk has one purpose - to increase his participation in the company. The billionaire's energy and time are focused on other projects while Tesla needs his attention.
In 2018, Tesla's board of directors invited Musk to buy up to 304 million shares at a fixed price below the market - 23.34 USD in order to motivate increasing the price of the company to 650 billion USD within 10 years . According to the terms, the CEO and founder of Tesla does not receive a salary, so the purchase of shares remains his only possible source of income from the company's activities.
Tesla plans to hold a second shareholder vote on June 13 to discuss the compensation package. If the decision is positive, it will be the largest bonus ever paid to a company executive.
Musk has headed Tesla since 2008. Under his leadership, the company became the leader in the electric vehicle market. Today, its share price exceeds USD 175 and its market capitalization is more than USD 560 billion. The automaker has faced a number of problems in recent years, including declining profitability, lawsuits and criticism of the quality of its electric cars. In 2022, Musk sold a significant stake in Tesla to buy the social network Twitter (now X) for USD 44 billion. At the same time, he runs SpaceX, The Boring Company, Neuralink, X and X.AI.