Tesla’s board of directors has bet the company’s future on Elon Musk. Now it’s the investors’ turn: Will they approve a stock payment of up to $878 billion to Musk, or will Tesla risk losing him?
The board argues that only Musk can make Tesla an “AI giant”. If Musk meets his performance targets over the next 10 years, the company’s value could rise to $8.5 trillion, and Musk could own a quarter of the shares.
This means the biggest CEO payout in history. However, some major investors and experts say this package is against corporate governance principles. Because Tesla’s fate is tied to a single leader — and also the largest shareholder. Giant investors like CalPERS and the Norwegian Sovereign Wealth Fund oppose the plan, emphasizing that it could dilute shareholder value and create “key person risk.” Nevertheless, there are those who support it. Professor from Harvard University… Krishna Palepu notes that Musk’s profit would only be possible by increasing the share price, which is consistent with shareholder interests: “The numbers are big because the goals are big.” Critics believe Musk has gained unparalleled bargaining power with the board thanks to his influence over Tesla’s shares. Board chair Robyn Denholm explicitly stated this risk, saying, “Without Elon, Tesla could lose significant value.” Despite this, some experts find Musk’s threat exaggerated. “This is like a man holding a gun to his own head saying, ‘Give me a trillion dollars,'” says Gautam Mukunda of Yale University, arguing that the board should not give in.
