Is Elon Musk leaving Tesla? Here's why he might quit

As Tesla prepares for its crucial shareholder meeting on June 13, chairperson Robyn Denholm has issued a stark warning: CEO Elon Musk may leave the company if shareholders vote against his $56 billion compensation package. This high-stakes vote follows a recent Delaware court ruling that invalidated a previous approval due to a flawed process.

In a letter to Tesla shareholders, filed with the Securities and Exchange Commission (SEC), Denholm emphasized Musk’s unique role and the atypical nature of Tesla as a company. "Elon is not a typical executive, and Tesla is not a typical company," she stated. "The usual methods of compensating key executives won't drive results for Tesla. Motivating someone like Elon requires a different approach."

Denholm underscored the significance of the vote, describing it as a matter of fairness, respect, and the future direction of Tesla. She warned that a rejection of the compensation package could lead Musk to focus his efforts elsewhere, where his innovative ideas and energy would be welcomed.

Key Points from Robyn Denholm's Letter:

Musk's Unique Motivation: Denholm highlighted that Musk’s motivations extend beyond financial gain. "This compensation package is obviously not about the money. Elon is one of the wealthiest people on the planet, and he would remain so even if Tesla were to back out of the commitment made in 2018."

Potential Departure: She cautioned that without adequate motivation, Musk might redirect his talents to other ventures. "He does not lack for ideas or other places where he can make a significant impact. We want those ideas and that energy to be focused on Tesla for the benefit of our shareholders."

Importance of Retention: Denholm stressed the necessity of retaining Musk’s attention and commitment to Tesla, given his involvement in multiple other projects, including SpaceX, X (formerly Twitter), Neuralink, xAI, and The Boring Company.

Influence on Tesla: Notably, Musk is seeking to increase his stake in Tesla to 25%, which would enhance his influence over the company’s strategic direction, particularly in areas like AI and autonomous driving. He has even suggested the possibility of spinning off Tesla’s AI research into a separate entity if his compensation demands are not met.

The upcoming vote represents a pivotal moment for Tesla, as shareholders must decide whether to support the record-breaking compensation package. Denholm’s letter serves as a call to action, urging shareholders to recognize the value of Musk’s leadership and to stand by the agreement that was originally made in 2018.