Elon Musk may ‘step back' if shareholders reject $56bn pay package, Tesla chair warns

Core Viewpoint - The chair of Tesla, Robyn Denholm, has indicated that Elon Musk may step back from the company if shareholders do not support his $56 billion pay package, emphasizing that the vote is not solely about money as Musk remains one of the wealthiest individuals globally [1][3]. Group 1: Shareholder Vote and Compensation Package - The upcoming vote on Musk's pay package is set for June 13, and it is the largest remuneration deal in US corporate history [1]. - Denholm stated that the purpose of the 2018 deal was to keep Musk focused on Tesla and motivated to achieve the company's ambitious goals [3]. - The compensation package includes stock options that require Musk to wait five years before selling any shares received [3]. Group 2: Musk's Other Interests and Investor Concerns - Musk has various business interests, including SpaceX, xAI, and X (formerly Twitter), which have raised concerns among Tesla investors regarding his focus on the electric carmaker [2]. - Some institutional investors, like Ross Gerber, have expressed that Musk's behavior on X has negatively impacted the Tesla brand [2]. Group 3: Voting Dynamics and Legal Considerations - Musk owns approximately 13% of Tesla, but his shares will not count towards the vote, which must be a majority of Tesla stock not owned by him or his brother Kimbal [6]. - Denholm has also requested shareholders to approve moving Tesla's legal base from Delaware to Texas, citing better growth and innovation opportunities in Texas [6]. Group 4: Analyst Perspectives - Analyst Dan Ives from Wedbush Securities believes that Musk is unlikely to leave Tesla entirely but may reduce his involvement if the compensation package is rejected [7].