Elon MuskThe chairperson of Tesla’s board of directors, Robyn Denholm, has defended the new multibillion-dollar compensation plan for CEO Elon Musk. The plan, which could be the largest in corporate history, was unveiled in a regulatory filing last week. In a recent interview with The New York Times, at Tesla’s engineering headquarters in California, Denholm said that Musk’s compensation should depend on his ability to achieve “seemingly impossible goals.” She stated that Musk is capable of delivering world-changing technology if he is driven by these ambitious targets, even as the company faces a drop in sales and profits. “Putting together any compensation plan, you need to look at what motivates the individual that you’re trying to motivate. And for Elon, it’s doing things that no one else has done before,” Denholm said when asked about Musk’s proposed pay package.
Denholm has been leading a campaign to secure investor approval for Musk’s compensation package, which will be worth nearly $1 trillion if the goals are met. She argued that his pay cannot be compared to that of other executives due to his “unique characteristics.” However, concerns remain given Tesla’s recent sales decline, profit drop, and the underperformance of the Cybertruck.
She said the focus on the package’s value is misplaced, as Musk is more interested in the voting power than the wealth, even though he must stay at Tesla for years to cash in the shares.
“It’s actually about the voting influence in the company for the next generation of growth that he sees. I think it’s a little bit weird talking about the dollars when it’s actually the voting influence,” Denholm explained.
Robyn Denholm on Tesla being criticised for Musk’s pay package
Some investors, including New Mexico’s state treasurer Laura Montoya, have criticised Tesla’s proposed trillion-dollar pay package for Musk, calling it unjustifiable given his role in the company’s struggles. “This plan is about future performance. It’s not about past performance. He gets nothing if he doesn’t perform against the goals,” Denholm said, responding to the criticism.
However, for Musk to get the payout, Tesla would need to achieve significant milestones like one million robotaxis, one million robots, a 24-times profit jump, and a stock value of $8.5 trillion. But the car sales targets seem easier, even as Tesla risks falling behind competitors like BYD, Geely, and Volkswagen.
Denholm even rejected claims that cars are no longer Tesla’s main business, despite its growing battery sales. Without discussing upcoming products in detail, she said: “There is still a lot of ambition in the vehicle space.”
She also revealed that Musk has shifted focus from cars to a vision of “sustainable abundance” with self-driving taxis and humanoid robots, a plan that Tesla’s board supports as well.
“It really is using technology to create a world where anything is able to be produced, goods and services are able to be produced in abundance,” Denholm added.
