Tesla's chairman publicly calls on shareholders to ignore the opposition of voting advisory firms and support Musk's "largest" compensation plan in history
Tesla's board chair Robyn Denholm urged shareholders to support Musk's compensation plan at the upcoming shareholder meeting, despite opposition from proxy advisory firms, unions, and corporate governance groups. The plan is based on Musk achieving high targets over the next 10 years, including raising the company's market value to $8.5 trillion, with a potential stock incentive of up to $1 trillion if achieved. Denholm emphasized that Tesla is different from traditional companies, and past advisor recommendations do not apply. The voting results will impact Tesla's future power structure and growth
According to the Zhitong Finance APP, on the eve of the shareholder meeting vote next week, Tesla (TSLA.US) Chairman Robyn Denholm publicly urged shareholders to ignore the opposition from voting advisory firms, labor unions, and corporate governance groups, and to vote in favor of CEO Elon Musk's compensation plan.
The compensation plan is based on Musk achieving extremely high goals over the next 10 years, including increasing the company's market value to $8.5 trillion and promoting the expansion of Tesla's Robotaxi business. Once the performance targets are met, Musk will receive stock incentives of up to $1 trillion (distributed in 12 phases), and his voting power in the company will rise to about 25%.
In an interview on Monday, Denholm stated, "Do you want to retain Musk as CEO and incentivize him to turn Tesla into the global leader in automation solutions and the most valuable company?"
Musk expressed his unease during the third-quarter earnings call, saying, "I don't want to build a robot army only to be kicked out of the company based on the recommendations of ISS and Glass Lewis." He criticized that passive index funds often follow the opinions of ISS and Glass Lewis, stating, "They have given catastrophic advice multiple times in the past." (Both major proxy voting advisory firms, ISS and Glass Lewis, have recommended shareholders vote against Musk's compensation plan and related votes on Tesla's involvement in xAI.)
Denholm also criticized these advisory firms in the shareholder letter, stating that they "do not apply to a company like Tesla." She wrote, "They apply standardized, average company models, but Tesla is anything but a conventional company; we have delivered a 39,000% return to shareholders since going public."
This highly controversial compensation plan will be submitted for a vote at the annual meeting on November 6, and the outcome may determine Tesla's power structure and growth path for the next decade
