(NewsNation) — The chair of Tesla is calling on the company’s shareholders to back CEO Elon Musk’s $56 billion pay package, warning that there are “other places” the entrepreneur could spend his time if they don’t.
In a letter to investors Wednesday, Tesla board chair Robyn Denholm said next week’s vote on Musk’s compensation package is “not about the money” but rather about honoring a commitment that shareholders overwhelmingly approved in 2018.
The June 13th vote comes after a Delaware judge shot down the plan earlier this year, arguing that Musk essentially controlled the board, making the process unfair to stakeholders.
If investors veto the landmark package, Musk could turn his attention to other projects, Denholm suggested.
“What we recognized in 2018 and continue to recognize today is that one thing Elon most certainly does not have is unlimited time. Nor does he face any shortage of ideas and other places he can make an incredible difference in the world,” Denholm wrote.
Musk, who also leads the rocket company SpaceX and owns the social media platform X, doesn’t take a salary from Tesla. Instead, his compensation is primarily in stock awards tied to performance metrics defined in 2018.
“For Elon to realize any benefit of the award, he had to hit milestones that directly and substantially benefited the Company and our stockholders. And it did exactly what it was designed to do,” Denholm wrote.
Tesla’s stock market value was $53 billion when Musk’s package was approved, per Reuters. Today, the company’s market cap is nearly $560 billion.
Multiple shareholder advisory firms have recently come out against reinstating the pay package. One such firm, ISS, said concerns about Musk spending too much time on other ventures haven’t been sufficiently addressed.
Another proxy advisory firm, Glass Lewis, opposed the package, saying it would dilute shareholders’ value by about 8.7%.
California Public Employees’ Retirement System (CalPERS), which owns 9.5 million Tesla shares, is also opposing the plan.
Other prominent shareholders, like billionaire Ron Baron, support the pay package.
If reapproved, the compensation plan would be the largest in the history of corporate America, according to Fortune magazine.
The Associated Press contributed to this report.
