Tesla’s chair has written to investors to sway them in approving CEO Elon Musk’s incredible $56 billion pay package, to ‘keep him motivated’.
Tesla’s chair, Robyn Denholm, who lives in a $27.5m penthouse in Sydney, Australia, had written to shareholders pleading with them to give the second-richest man in the world, billions of dollars in stock options.
In a matter of days, investors will vote on whether to approve the SpaceX Founder‘s $56 billion pay package, which was thrown out by a judge in January. Investors will decided if the bonus will be reinstated.
In a letter registered with the Securities and Exchange Commission, Denholm asks them to vote for the astronomical pay package to keep the CEO ‘motivated’.
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He writes: “Fairness and respect require that we honor the collective commitment we made to Elon — a commitment that was, and fundamentally still is, about retaining Elon’s attention and motivating him to focus on achieving astonishing growth for our company.”
Denolm speaks on ‘Elon’s unique contributions’ changed the trajectory of the car company, from a ‘loss-making, ambitious company with significant hurdles and challenges to overcome’ to the force it is today.
He proudly says the company is “literally changing the world by driving so many critical initiatives that are making our planet more sustainable while at the same time delivering hundreds of billions of dollars of value to all of you who invested in Tesla’s dream. These contributions should be respected.”
The chair adds investors’ commitment made to Elon Musk in 2018 was for one purpose “to keep Elon focused on Tesla and motivated to achieve the Company’s incomparable ambitions”.
The letter adds the pay package was ‘designed’ to keep the billionaire going: “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.”
He divulges in the six years since, the company has created more than ‘$735bn’ in value for stockholders, and to uphold their end of the bargain, they need to dish out the stock options.
Denholm warns: “If Tesla is to retain Elon’s attention and motivate him to continue to devote his time, energy, ambition and vision to deliver comparable results in the future, we must stand by our deal.”
But he’s aware that Elon Musk’s vast wealth stretches beyond Tesla and the proposed pay package. Aside from the vehicle manufacturer, he leads SpaceX, The Boring Company and Neuralink, which implanted it’s first human brain chip into a patient this year.
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Elon Musk’s the second-richest man in the world – and his pay package from Tesla won’t change that
The Tesla chair references Musk’s extreme wealth in the letter too.
He adds: “This is obviously not about the money. We all know Elon is one of the wealthiest people on the planet, and he would remain so even if Tesla were to renege on the commitment we made in 2018.
“Elon is not a typical executive, and Tesla is not a typical company. So, the typical way in which companies compensate key executives is not going to drive results for Tesla. Motivating someone like Elon requires something different. This is one of the key reasons the Award also requires Elon to hold any shares he receives upon exercise of stock options for five years after he exercises the options — which can only serve to incentivize him to continue delivering value to Tesla and our stockholders.”
It seems they’re afraid he won’t ‘retain’ his attention on the car company if he doesn’t get the substantial pay package.
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