The plea to investors comes ahead of Tesla’s annual shareholder meeting on Nov. 6, when votes will be counted on the historic pay plan and other key proposals. At the heart of the board’s message: Musk’s leadership is vital as Tesla pushes further into artificial intelligence, robotics, and autonomous driving—and without a new long-term incentive, the company might not retain Musk, who has defined its trajectory over the past decade-plus.
“Without Elon, Tesla could lose significant value, as our company may no longer be valued for what we aim to become,” Denholm wrote, adding that Musk’s “time, talent and vision… have been essential to delivering extraordinary shareholder returns.”
If shareholders do not support the pay package and “fail to foster an environment that motivates Elon to achieve great things through an equitable pay-for-performance plan, we run the risk that he gives up his executive position,” she added.
Musk’s proposed $1 trillion performance award includes 12 tranches of restricted stock, each tied to ambitious milestones that culminate in Tesla achieving a market capitalization of $8.5 trillion, which is more than quadruple its current valuation. The goals also include operational metrics such as delivering 20 million vehicles as well as deploying millions of robotaxis and AI robots over the next decade.
To put the magnitude in perspective, this compensation plan stands as the largest ever proposed in U.S. corporate history, surpassing Musk’s previous $56 billion package for 2018. That deal was invalidated earlier this year by a Delaware court after it found the process lacked proper board oversight and transparency.
In her letter, Denholm posed a direct question to investors: “Do you want to retain Elon as Tesla’s CEO and motivate him to drive Tesla to become the leading provider of autonomous solutions and the most valuable company in the world?”
She called the vote “a critical inflection point” for Tesla, emphasizing that Musk’s “unique” leadership cannot easily be replaced, particularly as the company shifts from being “just another car company” and races rivals to commercialize AI-driven vehicles and advanced robotics.
Opposition to the proposal is mounting, with proxy advisory firms Institutional Shareholder Services and Glass Lewis recommending shareholders vote no, pointing to its unprecedented size and concerns over board independence. Yet the Tesla board maintains that aligning Musk’s incentives with shareholder interests and providing the scale of ownership he seeks are essential to keep him “focused” and “committed for at least another 7.5 years.”
Shareholders have until 11:59 p.m. ET on Nov. 5 to cast their votes. The outcome could determine not just the future of Musk’s role at Tesla, but the company’s path as it seeks to lead in AI, autonomous vehicles, and robotics.
“The bottom line is simple: Elon is rewarded only if and when he delivers extraordinary performance that benefits all Tesla shareholders,” Denholm wrote.
You can read her full letter to Tesla shareholders below:
For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing.
