Tesla Chair Robyn Denholm urged shareholders on Monday to approve Chief Executive Officer Elon Musk’s nearly $1 trillion performance-based compensation plan, warning that the company could lose him if it is rejected.
“Without Elon, Tesla could lose significant value, as our company may no longer be valued for what we aim to become,” Denholm wrote in a letter to investors, as first reported by CNBC.
Denholm is scheduled to speak at 8:30 a.m. ET on CNBC to discuss the upcoming annual meeting and Musk’s proposed pay package.
As of the time of writing, Tesla shares are trading 1.2% higher at $439.
The shareholder vote closes at 11:59 p.m. ET on November 5, with the annual meeting set for the following day.
Several influential proxy advisors have opposed the proposal, including Institutional Shareholder Services (ISS) and Glass Lewis, both of which cited concerns over excessive dilution and limited board flexibility.
Egan-Jones Proxy Services, however, became last week the third major firm to issue a recommendation, siding with Tesla’s board.
The firm said it would support the “2025 CEO Performance Award” under its “Wealth-Focus Policy,” which prioritizes shareholder return and pay-for-performance alignment.
Egan-Jones said the potential payout—tied to Tesla reaching a $7.5 trillion market capitalization, the deployment of 1 million robotaxis, and deliveries of 1 million Optimus humanoids—was justified within that framework.
Musk must also remain at the company for at least 7.5 more years to receive the full award.
“If Mr. Musk fails to meet the specified milestones, he will receive nothing,” the firm said. “If he succeeds, both Mr. Musk and shareholders stand to benefit significantly.”
The firm nonetheless warned that Musk’s ownership could rise to 28.8% if the plan succeeds, further reducing shareholder influence. It also noted the vast gap between Musk’s potential compensation and employee pay, saying it could affect morale and create long-term risks.
Under its environmental, social, and governance (ESG) and accountability policies, Egan-Jones said it would likely vote against the proposal—aligning with ISS and Glass Lewis, which both called the payout “extraordinarily high.”
Responding to the criticism, Tesla’s board chair accused the proxy firms of misunderstanding the company’s unconventional strategy.
“I encourage you to ignore ISS’s and Glass Lewis’s advice for this year’s Annual Meeting and vote with the Board’s recommendations on all proposals,” Denholm wrote, calling the plan “an investment, not dilution.”
“If you prefer that Tesla turn into just another car company mired in the ways of the past, then you should follow ISS and Glass Lewis,” she added.
Musk has long criticized the proxy advisory industry, accusing ISS and Glass Lewis of exerting outsized influence over index funds. In past social media posts, he has mockingly referred to ISS as “ISIS.”
Unlike Tesla’s 2018 compensation plan—which ISS and Glass Lewis also opposed—Musk will be permitted to vote on the upcoming proposal, according to Reuters.
