The fate of Tesla CEO Elon Musk's proposed $1 trillion pay package will be in the balance on Thursday as shareholders vote on whether to approve the historic compensation plan.
Under the pay plan, which was proposed in September, Musk would receive up to about 12% of Tesla's stock, which would be subject to restrictions and worth about $1 trillion if Tesla reaches a market capitalization of $8.5 trillion and other operational milestones over a 10-year period. Tesla's current market valuation is about $1.45 trillion, and Musk currently owns about 13% of the company's outstanding shares.
The revised compensation plan was put forward amid legal uncertainty over the $56 billion pay package he was awarded in 2018, which was voided by a Delaware judge in January 2024 and remains the subject of ongoing litigation.
Tesla board Chair Robyn Denholm has warned shareholders that the company could lose Musk to his other entrepreneurial pursuits if his pay package is not approved.
TESLA COULD LOSE MUSK IF $1T PAY PACKAGE ISN'T APPROVED, BOARD CHAIR WARNS
Denholm sent a letter to shareholders that asked, "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?"
"If we 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, and Tesla may lose his time, talent and vision, which have been essential to delivering extraordinary shareholder returns," Denholm added.
MUSK PLEADS WITH TESLA INVESTORS TO APPROVE HIS MASSIVE $1T PAY PACKAGE DEAL
Musk took a moment on Tesla's latest earnings call to urge shareholders to approve the package as he wants enough voting control "to give a strong influence, but not so much that I can't be fired if I go insane."
Not all Tesla shareholders are going to support the pay package, and one investor with a sizable stake in the company signaled opposition to the plan in advance of the vote.
MUSK TEASES TESLA FLYING CAR: 'CRAZY TECHNOLOGY'
Norway's sovereign wealth fund, Tesla's sixth-largest external investor, said it would vote against the compensation plan.
"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 in a post on its website.
Proxy advisory firms Glass Lewis and ISS have also urged shareholders to reject the pay package.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Last year, Tesla shareholders were asked to vote on reinstating his $56 billion pay package from 2018, and they obliged, with about 77% of shareholders in favor. The pay package was worth about $44 billion at the time of the shareholder vote due to declines in Tesla's stock price.
FOX Business' Daniella Genovese and Reuters contributed to this report.