Tesla shareholders will determine the fate of a massive pay package meant to retain Elon Musk long enough to achieve technological breakthroughs he vows will change the world.
Musk – who has boasted that Tesla's engineering prowess in artificial intelligence, autonomy and robotics will leave rival tech giants in the dust – stands to garner as much as $1 trillion in an unprecedented package tied to performance benchmarks.
Tesla Chair Robin Denholm has appeared on CNBC and other broadcasts in recent weeks to sell the plan in a sign of the board's continued enthusiastic backing for Musk, despite criticism the billionaire's embrace of conservative political figures has weighed on sales.
"Without Elon, Tesla could lose significant value, as our company may no longer be valued for what we aim to become: a transformative force reimagining the fundamental building blocks of mobility, energy and labor," Denholm said in an Oct. 27 message to shareholders.
Musk himself has hinted he could leave Tesla or take a back seat if his ownership share is not raised enough to give him the influence over its future that he desires.
The package could lift Musk's holding to more than 25% of Tesla shares from its current level of more than 12%.
"It's not like I'm going to spend the money," Musk said on a conference call in October. "It's just if we build this robot army, [I want to] have at least a strong influence over that robot army."
The outcome of the vote will be announced at the annual shareholder meeting at Tesla's factory in Austin, Texas, on Thursday.
Anti-Musk protesters plan a demonstration outside the Tesla gigafactory that day, after an anti-Musk rally in downtown Austin on Wednesday.
"A trillion dollars is way too much any person should have under any circumstances," activist Ethan McBride told AFP, calling the package a means of "enriching the man who is funding degradation of our democracy."
He must hit 12 milestones related to market capitalization to receive the full pay package. The first tranche would be available if and when Tesla reaches $2 trillion in market value.
The plan also involves a series of operating profit and product goals, such as the delivery of 20 million Tesla vehicles. The package aims to ensure Musk stays at Tesla for at least seven-and-a-half years.
Musk has described Tesla's potential growth as nearly boundless, saying in July that "Tesla will be the most valuable company in the world by far" if the company delivers on its vision for autonomous driving and artificial intelligence.
Musk's success in growing Tesla, SpaceX and other ventures has inspired many believers. However, skeptics have complained that the company has been slow to introduce new models and that Musk has a penchant for pushing back or not delivering on targets that sound difficult if not impossible.
The pay proposal has been panned by Glass Lewis and Institutional Shareholder Services (ISS), advisory firms Musk has referred to as "corporate terrorists."
An Oct. 17 ISS analysis of the proposal criticized the rationale for the potential windfall, noting that Musk's financial interests are already closely tied to Tesla's fate.
As structured, the separation of the overall package into tranches of "unprecedented" value "could undermine the necessity for all goals to be realized," said ISS, which also flagged the lack of explicit requirements that the busy Musk keep focused on Tesla.
Norway's sovereign wealth fund, one of Tesla's 10 largest shareholders, said this week it was voting no.
"While we appreciate the significant value created under Mr Musk's visionary role, we are concerned about the total size of the award, dilution and lack of mitigation of key person risk – consistent with our views on executive compensation," Norges Bank Investment Management said on its website.
Others voting against the proposal
Florida state officials have endorsed the plan, noting Musk's record of creating equity value and calling the package the "gold standard for executive compensation."