WASHINGTON (dpa-AFX) - Tesla Inc. (TSLA) is preparing internal candidates to succeed CEO Elon Musk if shareholders reject his proposed $1 trillion compensation package and he steps down, according to Board Chair Robyn Denholm.
In an interview on Tuesday, Denholm said an 'orderly transition' would most likely involve promoting from within but did not rule out external hires. The remarks come ahead of Tesla's November 6 shareholder meeting, where investors will vote on Musk's record-breaking pay plan, which ties his compensation to milestones in market value, robotics, and AI development.
Denholm acknowledged that if the proposal fails, Musk could 'back away or become less engaged,' citing direct conversations with him. Musk has hinted he may redirect his focus toward SpaceX, xAI, or other ventures if he doesn't secure greater control over Tesla.
Tesla's board has launched a media and investor campaign to rally support, with Denholm, James Murdoch, and Jack Hartung meeting major institutional investors, including Vanguard, BlackRock, and State Street. The company faces headwinds after proxy advisers ISS and Glass Lewis urged shareholders to vote against the deal.
In a bid to boost enthusiasm, Tesla showcased its Optimus humanoid robot outside the Nasdaq exchange in New York, where it handed out branded candy to passers-by.
Despite the uncertainty, Tesla shares rose 2.9 percent, extending their 12 percent gain in 2025, still behind the broader S&P 500's 17 percent rise. Denholm emphasized that the new pay plan aims to keep Musk focused on Tesla's AI and robotics initiatives, rather than diverting those efforts to his other companies.
If the proposal fails, Denholm said Tesla has a 'Plan B,' citing a strong internal leadership bench, including global production chief Tom Zhu. She added that the board may even consider a co-leadership model if needed.
Another issue on the ballot is a nonbinding vote on investing in Musk's AI firm xAI. Denholm clarified Tesla has not yet invested, noting that xAI's work differs from Tesla's applied AI focus, but said any future move would undergo a formal review if shareholders approve.
Monday, TSLA closed at $460.55, up 1.8%, and currently trades after hours at $460.03, up 0.11% on the NasdaqGS.
Copyright(c) 2025 RTTNews.com. All Rights Reserved
Copyright RTT News/dpa-AFX
© 2025 AFX News
