Tesla Chairman Robyn Denholm has stated that if shareholders reject Elon Musk’s proposed $100 billion compensation package and it leads to his resignation, the electric car manufacturer is prepared to appoint an internal candidate as the new CEO.
According to Bloomberg, Denholm mentioned in an interview at the media headquarters in New York on Tuesday (October 28th) that to ensure a “smooth transition,” the “most likely” successor for the CEO position would be selected internally, but she did not rule out the possibility of considering external candidates.
She told Bloomberg reporters, “I have spoken directly with him (Musk). I have no doubt that if we do not pass this plan, it is quite possible” that he will leave the company or reduce his involvement in the company’s operations.
Denholm wrote to company shareholders on Monday, urging them to vote in favor of the proposed CEO compensation plan so that Musk can continue to lead Tesla, especially at a time when the company is focusing on developing autonomous driving technology and humanoid robots.
This move by Denholm highlights that despite the pressure on Tesla to reduce its reliance on Musk, the world’s richest man still remains central to the Tesla brand and investor confidence.
According to the proposed compensation plan announced in early September, Tesla will grant Musk 12 batches of stock options, with these staggered options linked to a series of challenging targets, including achieving a market value of $8.5 trillion for Tesla within the next ten years, as well as making significant progress in milestone achievements in autonomous driving and robotics technologies. Musk will not receive any fixed salary or cash bonuses, with all his rewards tied entirely to the company’s performance. If he can help the company achieve its growth targets, he will receive 25% of the shares.
Musk has warned that if he does not receive the desired compensation plan and greater voting control, he will resign as Tesla CEO or shift his focus to xAI, SpaceX, and his business in other companies.
Tesla will vote on Musk’s compensation plan at the company’s annual shareholder meeting on November 6th.
While there are currently few signs indicating that the vote will fail, Denholm stated that investors often wait until the last moment to make decisions, so the company cannot take it lightly.
As retail investors make up about 30% of Tesla’s investor base, the typically low-profile company feels it is necessary to conduct a “get out the vote” campaign this time.
Denholm told Bloomberg that if the vote fails, the company has prepared a “Plan B.”
The chairman also mentioned that Tesla has prepared a “whole series of different alternative plans,” including having multiple individuals manage the company.