- Elon Musk’s record pay package was nullified by a Delaware judge earlier this year.
- Tesla’s chairperson of the Board of Directors says Musk needs to be compensated to keep him motivated.
- The EV company is also seeking approval to move its state of incorporation to Texas.
Tesla continues to plead with its shareholders to ratify Elon Musk’s extraordinary 2018 compensation package ahead of the firm’s Annual Shareholder Meeting on June 13.
A letter addressed to Tesla shareholders by Robyn Denholm, chairperson of the Board of Directors, asserts that the billionaire’s performance awards must be approved to keep him motivated. The letter comes seven weeks after Tesla started its campaign to vote on the pay package for a second time after it was rejected by a Delaware judge earlier in the year for being improperly approved.
Read: Tesla Pleads With Shareholders To Reinstate Elon Musk’s $56 Billion Pay Package
“These votes are about fairness, respect and the future of Tesla,” Denholm writes in the letter. “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. Elon’s unique contributions have built Tesla from a company that was, in 2018, a loss-making, ambitious company with significant hurdles and challenges to overcome into what it is today — a company that 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.”
In the letter, Denholm asserts “this is obviously not about the money,” noting that Musk will remain “one of the wealthiest people on the planet” regardless of whether the carmaker reneges on his pay package. However, she adds that “motivating someone like Elon requires something different,” and that he doesn’t have “unlimited time” and has “no shortage of ideas and other places he can make an incredible difference in the world.”
Tesla’s chairperson of the Board of Directors, herself a successful Australian executive, appears worried that if the pay package is not certified, Musk will shift his focus to one of the myriad of other companies he owns. “We want those ideas, that energy and that time to be at Tesla, for the benefit of you, our owners,” she writes.
The company is also seeking shareholder approval to move its state of incorporation from Delaware to Texas. In the letter, Denholm says “Texas provides stockholders with substantially equivalent governance rights as Delaware, and is expected to provide more certainty for the innovative, big-ticket decisions that Tesla is known for.”
