Tesla’s board chair threatens shareholders with losing CEO Elon Musk unless they approve an unprecedented $1 trillion compensation package that would fundamentally reshape executive pay across corporate America.
Story Highlights
- Board chair Robyn Denholm warns Musk could “step away” if shareholders reject the massive pay proposal
- The $114 billion package represents the largest CEO compensation in U.S. corporate history
- Shareholders face a November vote that the board frames as choosing between Musk or “significant value” loss
- The proposal follows years of legal battles over Musk’s previous $2.6 billion pay package from 2018
Board Issues Ultimatum to Tesla Shareholders
Robyn Denholm sent a stark warning letter to Tesla shareholders on October 27, 2025, essentially holding the company hostage over Elon Musk’s compensation. Her message posed a direct question: approve the trillion-dollar package or risk losing the CEO entirely. This corporate brinkmanship forces investors into an impossible choice between unprecedented executive compensation and operational uncertainty. The board’s tactics reveal how dependent Tesla has become on a single individual, undermining principles of sound corporate governance that conservatives typically champion.
Historic Compensation Package Breaks All Precedents
The proposed compensation structure combines an $87.8 billion main award with a $26.1 billion “interim” award already granted in August 2025. This $114 billion total dwarfs any previous executive compensation in American corporate history. The package requires Tesla to grow by $7.5 trillion in market capitalization, compared to the $600 billion target from Musk’s controversial 2018 award. Such astronomical figures represent a fundamental departure from traditional executive compensation principles that tie pay to reasonable performance metrics.
Delaware Court Ruling Exposes Governance Failures
The current compensation battle stems directly from the Delaware Chancery Court’s January 2024 ruling that rescinded Musk’s 2018 stock options. The court found Tesla shareholders were not fully informed about the original package, highlighting serious governance deficiencies. Despite shareholders ratifying the 2018 award for a second time in 2024, the legal precedent established important disclosure requirements. This ongoing litigation demonstrates how Tesla’s board has repeatedly failed to maintain proper oversight and transparency standards expected in public companies.
Shareholders Face Impossible Corporate Governance Choice
The November shareholder vote represents more than executive compensation—it tests whether corporate boards can effectively blackmail investors through departure threats. Tesla’s position creates a dangerous precedent where essential executives can demand unlimited compensation by threatening to leave. This undermines shareholder rights and fiduciary responsibility principles that protect investors from management overreach. The board’s warning essentially admits Tesla lacks proper succession planning and over-relies on a single individual, violating basic corporate governance standards that ensure company stability.
If approved, this package would create America’s first trillionaire while setting a catastrophic precedent for executive compensation across all industries. The concentration of such wealth in a single individual through corporate mechanisms raises fundamental questions about capitalism, shareholder protection, and corporate responsibility that every American investor should carefully consider before this precedent-setting vote.
Sources:
Tesla chair shareholders elon musk 1 trillion pay package vote – Business Insider
