The board of Tesla Inc. (NASDAQ:TSLA) is struggling to maintain CEO Elon Musk's total commitment while he manages multiple ventures. It is attempting to reinstate Musk's record multibillion-dollar compensation package from 2018, which a Delaware judge overturned.
What Happened: Tesla Chair Robyn Denholm is trying to persuade shareholders to re-approve the record compensation package offered to Musk six years ago.
The package, now rescinded, was initially structured to ensure Musk's full commitment as Tesla's CEO.
Denholm is also working to convince shareholders that the compensation package, with its holding requirements, incentivizes Musk to continue propelling Tesla's growth, reported The Wall Street Journal.
However, the vote could also be interpreted as a measure of Tesla's dependency on Musk, particularly when he is not entirely devoted to the electric car manufacturer.
Musk, managing six companies, has become increasingly involved in controversial social and political matters, which are starting to impact Tesla's main business.
This has led the board to vie for Musk's attention, raising doubts about his dedication to Tesla.
The Delaware judge suggested that Musk's motivation should have come from his existing equity stake in Tesla, which would have gained over $10 billion for every $50 billion increase in market value.
Tesla contends that shareholders approved the plan, Musk fulfilled it, and he is the only one to receive what was promised.
Why It Matters: Denholm has made a video appeal to shareholders, emphasizing the importance of the vote for Tesla's future.
She argued that a single judge's ruling should not override the collective decision of Tesla's millions of owners.
Last month, several companies, including The Boring Company, under Musk billed each other approximately $9 million in expenses.
These inter-company transactions have raised serious questions about corporate governance.
This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.