Tesla Inc. (NASDAQ:TSLA) Board Chair Robyn Denholm defended CEO Elon Musk‘s $1 trillion compensation package, arguing it motivates unique performance despite declining sales and profits.
Check out the current price of TSLA stock here.
Denholm Justifies Pay
Denholm said in an interview with The New York Times at Tesla’s Palo Alto headquarters that for Musk, it's about doing things that no one else has done before. She added that the package gives Musk shares worth nearly $1 trillion if he deploys one million autonomous taxis, one million robots, and increases Tesla's market value to $8.5 trillion.
"It's actually about the voting influence in the company for the next generation of growth that he sees," she said. "I think it's a little bit weird talking about the dollars when it's actually the voting influence."
Performance Targets Under Review
Tesla has to increase its profits by 24 times and keep selling 1.2 million vehicles a year until 2035. However, the company is now lagging behind Chinese competitors like BYD (OTC:BYDDF) (OTC:BYDDY) and Geely (OTC:GELYY), following a decline in car sales and disappointing performance from the Cybertruck.
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Political Opposition Grows
Sen. Bernie Sanders (I-Vt.) called the package “grossly immoral,” questioning “$900 billion for Elon Musk, while 60% live paycheck to paycheck.” New Mexico State Treasurer Laura Montoya, whose pension fund holds Tesla shares, called it “unconscionable,” according to the report.
Board Independence Questioned
Denholm insisted on board independence despite criticism over member compensation. The special committee included Denholm and former Walgreens executive Kathleen Wilson-Thompson, while other members are Musk associates.
Morgan Stanley analyst Adam Jonas called it “a good deal for Tesla shareholders,” noting the figure is “modest compared to market opportunity” in robotics and autonomous vehicles.
Shareholders will vote on the compensation plan at Tesla’s November annual meeting.
Price Action: On Friday, TSLA closed at $395.94, up 7.36% for the day.
Benzinga's Edge Stock Rankings show that TSLA has a Momentum score of 87.82 and a Growth score of 75.51, with a positive price trend across all time frames. Know the stock value of other players in the sector.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
