Pay him or he

Core Viewpoint - Tesla shareholders are faced with a critical decision regarding a compensation plan for Elon Musk that could amount to $878 billion, which the board frames as essential for retaining Musk's leadership and the company's future growth [2][4]. Group 1: Compensation Plan Details - The proposed compensation package for Musk is unprecedented, potentially requiring Tesla's market value to reach $8.5 trillion over the next decade for Musk to achieve all performance milestones [7]. - If Musk does not meet these targets, he could still receive payouts in the tens of billions, indicating a significant financial commitment from the company [7]. - The board emphasizes that losing Musk could lead to a substantial decline in Tesla's market value, as the company is heavily reliant on his vision for future innovations like self-driving robotaxis and humanoid robots [3][5]. Group 2: Investor Reactions - Major investors, including CalPERS and Norway's sovereign wealth fund, have expressed opposition to the compensation plan, citing concerns over excessive size and the risks associated with concentrating power in one individual [4][9]. - Governance experts argue that the proposal represents a dangerous shift in corporate governance, potentially undermining responsible management practices [8][9]. - Some investors view the compensation plan as a necessary alignment of interests, believing that Musk's leadership is crucial for Tesla's ambitious goals [8]. Group 3: Legal and Structural Considerations - The vote on the compensation plan is complicated by Tesla's recent reincorporation in Texas, which may provide Musk with advantages in voting on the proposal due to more favorable legal conditions [11][12]. - The board's previous compensation package for Musk was voided by a Delaware judge, which has influenced the current negotiations and the urgency of the new proposal [11][12]. - The board's strategy includes provisions for extended stock vesting periods to ensure Musk's long-term commitment, but the reliance on a single individual remains a significant risk [6].