Tesla Chairman of the Board Talks Elon Musk's Compensation Package and Future at Company

Summary

Podcast Summary: Bloomberg Talks

Episode: Tesla Chairman of the Board Talks Elon Musk's Compensation Package and Future at Company
Date: October 28, 2025
Host: Bloomberg
Guest: Robyn Denholm, Chair of Tesla’s Board of Directors

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Episode Overview

This episode features an in-depth conversation with Robyn Denholm, Chair of Tesla’s Board of Directors, focused on Elon Musk’s proposed compensation package, its implications for his future at Tesla, and the strategic direction of the company. Denholm addresses shareholder concerns, the nature and intent of the pay package, succession planning, performance expectations, and the rationale behind Musk’s voting influence. The discussion is framed by ongoing media attention, proxy advisory recommendations, and a significant pending shareholder vote.

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Key Discussion Points & Insights

1. Nature of Elon Musk’s Compensation Package

• Performance-Based Structure: Denholm emphasizes that the package is tied to “audacious milestones” and that Musk “gets nothing if he doesn’t perform” (02:04).
• Focus on Performance, Not Just Compensation:

  "Rather than compensation, it’s actually about the performance and the goals that we have for the company as we move forward."
  — Robyn Denholm [02:13]

• Voting Influence Over Economic Benefits:
  • The main concern is Elon’s voting influence and leadership, not only his potential economic reward.

  "Elon's been very public...about the fact that it's around the voting influence that he could have in future shareholder meetings as opposed to the economic interests."
  — Robyn Denholm [02:37]

2. Shareholder Engagement & Concerns

• Denholm and the board are actively meeting with top institutional and retail investors to solicit feedback and answer questions (00:52).
• Proxy Advisory Opposition:
  • Notably, proxy advisors like Glass Lewis and ISS have recommended against the package due to its size (01:35).

3. Succession Planning and Contingency for a "No" Vote

• Risk of Musk’s Departure:

  "There is a very real risk that Elon leaves if the vote is a no." — Shareholder/Interviewer [03:07]

• Plan B & Succession:
  • Denholm confirms ongoing board discussions regarding succession planning:

  "Succession planning is an important part and so much so that we've actually baked in an orderly succession plan... as part of this performance plan."
  — Robyn Denholm [03:56]

  • However, she concedes "there is no other person that is Elon," underscoring Musk’s unique value to Tesla and the absence of an equivalent replacement (05:23).
• Probability of Departure:

  "If it's no, the probability that Elon goes 100%—well, time will tell. But he's been very, very public...it would be more of a say on his leadership over this period of time, not just about the performance plan itself."
  — Robyn Denholm [06:36]

4. Strategic Goals & The Place of Energy Products

• Energy’s Role in Company Performance:
  • While energy is central to Tesla’s future, it isn’t a standalone goal in Musk’s compensation plan since:

  "It is absolutely embedded in the goals...you can't get there without a robust energy outcome."
  — Robyn Denholm [07:40]

• The massive EBITDA targets ($50B, $400B) reflect required performance in both automotive and energy sectors.

5. Interim Awards and the Delaware Litigation

• Potential for Interim Compensation:
  • The board considered interim mechanisms, given the Delaware appeal over Musk’s 2018 plan and the ongoing need to attract and retain AI talent.

  "We have not ruled that out...the special committee was charged with looking at all matters compensation wise."
  — Robyn Denholm [09:07]

  • An interim award with a two-year vesting period was issued in August 2025, forfeitable if the company wins the Delaware appeal.

6. Structure of Voting Rights vs. Monetary Rewards

• Voting Power:
  • Tesla cannot retroactively create a dual-class share structure to provide Musk with voting-only power.

  "It's just not possible once a public company has gone public to introduce a special class of voting shares."
  — Robyn Denholm [11:05]

  • As a result, voting and economic rights are structured to vest first in terms of control, then in monetary value.

7. Why Elon Musk?

• Uniqueness of Leadership:
  • Denholm argues Musk’s blend of manufacturing and AI expertise is unmatched.

  "I think there's not another person on the planet that has the skill set that Elon has...that confluence of those technology skills."
  — Robyn Denholm [12:44]

• Governance and Technological Risk:
  • The board acknowledges governance over risks emerging from new technologies, with Musk seen as essential to managing both opportunity and hazards.

8. Impact of Delaware Litigation on Strategy

• Denholm insists that while disruptive, the 2018 compensation dispute hasn’t prevented board authorization of new strategic initiatives (14:33).

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Notable Quotes & Memorable Moments

• “There is no other person that is Elon.”
  — Robyn Denholm [05:23]
• “If it's no, the probability that Elon goes 100%—well, time will tell.”
  — Robyn Denholm [06:36]
• On voting rights:
  “It’s just not possible once a public company has gone public to introduce a special class of voting shares...we were not able to come up with something that would enable us to do that.”
  — Robyn Denholm [11:05]
• On Musk’s unique value:
  “There’s not another person on the planet that has the skill set that Elon has...that confluence of those technology skills.”
  — Robyn Denholm [12:44]

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Key Timestamps and Segments

• [00:18] – Opening; Introduction to the pay package and shareholder meetings
• [02:04] – Explanation of the performance-based nature of the compensation plan
• [03:07 – 05:23] – "Plan B" and conversation about the risk of Elon Musk leaving
• [06:36] – Probability of Musk’s departure if the vote fails
• [07:29] – Energy products’ role in performance goals
• [09:07] – Interim compensation and response to Delaware litigation
• [10:55] – Challenges of providing voting influence without monetary compensation
• [12:44] – Why Musk is seen as uniquely qualified for leadership
• [14:33] – Delaware litigation’s effect (or lack thereof) on Tesla’s strategy

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Conclusion

This episode provides a rare, candid look at Tesla’s high-stakes governance issues and the tension between ensuring Elon Musk’s continued involvement and managing the expectations of diverse shareholders. Robyn Denholm underscores the board’s conviction in Musk’s irreplaceability, the rationale behind the structure of his compensation, and the centrality of performance and influence—rather than pure economic reward—in the package. The episode is invaluable for understanding the board’s perspective on leadership, risk, and the pressures shaping Tesla at a pivotal moment in its corporate history.

Transcript

[Indiana University Narrator]

Indiana University is shaping the future of healthcare, advancing discoveries that become treatments for Alzheimer's, obesity and cancer and training the providers trusted to deliver them. See how IU solves what's next iu Edu Impact.

[Podcast Host]

Bloomberg Audio Studios Podcasts Radio news We are pleased to welcome our TV and radio audiences worldwide as we're joined here in New York by Robin Denham, Chair of Tesla's Board of Directors in New York. Meeting with shareholders, key institutional shareholders of Tesla, because there's a pay package that many have been analyzing that will keep, from your perspective, Elon Musk in the driving seat and CEO of Tesla. Who are you meeting with and what thus far has been the response been to this pay package that could see Elon paid as much as $1 trillion?

[Robin Denholm]

Well, thank you for having me today. Yes. As part of our annual shareholder meeting, I meet with the top investors that in Tesla on the institution side and obviously also talk to retail investors through forums like this this morning to, to encourage everybody to vote, but also to answer any questions that they have. From a board perspective, we really like to engage with our shareholders, understand their questions, their concerns, their optimism for the future. And so it's a really important part of the process we go through on a quarterly basis, but also with the proxy on an annual basis as.

[Podcast Host]

So the initial feedback, is it one of optimism around the pay package? We've heard from Glass Lewis from iss, which have said they're not in agreement with the way in which the pay package is thus formed. The key concern seems to be the sheer amount of money going to Elon Musk, if indeed he achieves all of those key milestones. But for you it's about, and for Elon, influence, it seems like. So how are you managing to discuss that with the investors, institutional and retail?

[Robin Denholm]

Yeah, so firstly it is a performance performance package. So he gets nothing if he doesn't perform against the pretty audacious milestones that are part of the performance criteria that's been outlined by the board in the, in the performance package. So, so I think rather than compensation, it's actually about the performance and the goals that we have for the company as we move forward. And so for me, it really is about making sure that investors understand that, that they actually get paid if he hits the milestone before he will. And but to your point, it is about voting influence. Elon's been very public, including on last week's earnings call, about the fact that it's around the voting influence that he could have in future shareholder meetings as opposed to the economic interests of the shares that he would get as part of the performance plan.

[Shareholder/Interviewer]

Robin, good morning from Washington D.C. you've acknowledged that there is a very real risk that Elon leaves if the vote is a no. This question we get most often from shareholders to you is what's the plan B? Either is there a plan B as a different person stepping up, or have you discussed with Elon the idea that it will result in a no vote and that you can use some kind of bridging mechanism, another interim pay award, for example?

[Robin Denholm]

Well, he's been quite public in terms of the implications of a no vote being on his leadership as well as on the, obviously on the, the performance plan itself. And so from our perspective as a board, we, we obviously take our fiduciary responsib seriously to all shareholders and having, you know, a succession plan, you know, those types of things, things we've discussed on an ongoing basis, particularly, you know, if something untoward were to happen. So from our perspective, succession planning is an important part and so much so that we've actually baked in an orderly succession plan, a plan for a plan, if you like, as part of this performance plan. So the last two tranches of the, of the performance are unlocked by having a, a robust performance plan that, sorry, succession plan that Elon would be part of.

[Shareholder/Interviewer]

If Elon Musk walks away from Tesla on November 6th or 7th because of a no vote, is there a contingency where there is an individual already within Tesla or an individual outside of Tesla that is lined up as, as a near term option?

[Robin Denholm]

Yes. So from our perspective, the most important thing at this point in time is making sure that we're explaining all of the items on the shareholder agenda for the annual shareholder meeting. Making sure that institutional investors, retail investors have their questions answered. That's our most important thing right at this point. And we are only.

[Shareholder/Interviewer]

Robin, that is their question. Who's the backup plan? Is the question that they're asking you?

[Robin Denholm]

Well, there is no other person that is Elon. We think that he is the right leader for the company over this next decade and delivering the plan and the opportunities ahead of us. So it's about how do we create the most value for the company and for our shareholders over this next period of time and he, he is the right leader for us over this next decade.

[Podcast Host]

Can you give me a sense of probability if the vote is know what probability loan walks.

[Robin Denholm]

So, so right at this point in time, it's too early to actually make a call on the outcome. Most investors wait to the Last minute to vote. So we're still early in that cycle, which is one of the reasons why I'm in New York to meet with our institutional investors. And we will get a better sense, you know, as the votes come in. And some institutions are more public than others in terms of how they're going to vote. So yesterday there was public announcement by the pension fund in Florida. And so other investors will start to make their, their votes public as well.

[Podcast Host]

But if it's no, the probability that.

[Robin Denholm]

Elon goes 100%, well, time will tell. But he's been very, very public in terms of, you know, it would be more of a say on his leadership over this period of time, not just about the performance plan itself in terms of a no vote. Yeah.

[Shareholder/Interviewer]

Robyn, you've been generous with your time. You know, we've already spoken with you in September at length about the goals that you've set for Elon Musk. But one of the things that came out of that from, again, the shareholder base is why are the energy products not as strictly mandated to Elon when you consider the earnings that just posted, that was a growth driver. Right. It's such a key part of Elon Musk's master plan, part four, and this abundance that he's going after. So why didn't you include energy products as a stated goal?

[Robin Denholm]

Yes. So there are many different goals that we looked at. Energy is an important part of the, the Tesla product lineup today and in the future. And you can see the impact that energy is having not only on the results, but also on the transition to sustainable energy longer term. So it is embedded in the plan, the EBITDA goals that we have as a company, you can't get there without a robust energy outcome. And so, so again, if you look at the results of last week, energy contributed very significantly. And to get to $400 billion of adjusted EBITDA is, is a monumental task for anybody. No one out there, at least to my knowledge, is, is at that sort of level. And so even the first EBITDA goals, at $50 billion is nearly three times our highest EBITDA goals that we've had. So from our perspective, it is absolutely embedded in the goals. To your point, it's not a specific line item in terms of the revenue or the units or the kilowatts of energy or megawatts of energy that are out there, but it is implicit in the plans. And the master plan for, you know, talks about that as well. In terms of getting to sustainable abundance.

[Shareholder/Interviewer]

Robin has the special committee and the advisers that you took on discussed the use of interim awards in the event of a no vote and how you might replicate what you did already.

[Robin Denholm]

Well, there's an important other measure on the board as well, proposal in terms of increasing the share pool that we have, firstly for our employees. As you know, we're in a talent war at the moment, moment particularly around AI talent and adding to the employee reserve as part of that to actually increase the amount of equity that we have for our employee program. But secondarily, we've also asked shareholders to add to the pool in the event that we need to award an amount to Elon to compensate for the 2018 plan. Because as you know, we put an interim award for roughly one third of what he earned under the 2018 plan, given the appeal that is ongoing in Delaware at the moment. So. So we have not ruled that out. The special committee was charged with looking at all matters compensation wise. As you're aware, in August we did actually award a, an interim award which does have a two year vesting period and is forfeited if we win the appeal in Delaware for the 2018 compensation program.

[Podcast Host]

It does seem then to be about money. And I'm interested as to how you continue to. You've made very clear it's about influence as well. Some of the feedback has been just a gargantuan amount that could go to Elon in terms of monetary value. But then others are worried about the dilution to other shareholders. How was it in just no way possible to give him more voting rights without the $1 trillion mega money bonus?

[Robin Denholm]

It feels like. Yeah, I mean, we looked at many different instruments to be able to award equity that had voting rights versus the economic value. And it's just not possible once a public company has gone public to introduce a special class of voting shares. Other companies have that. If you look at some of the tech companies, they have two classes and founder shares if you like, or special voting rights exist. But for Tesla, that wasn't implemented at the time that we actually went public and therefore we weren't able to use that type of instrument. But what we were able to do was to bifurcate the voting rights versus the economic rights. And so under the plan, the first, all the awards have voting rights that are earned first and then the economic rights happen, you know, seven and a half years later in the first instance or 10 years later. So it really isn't about the economic or monetary value, it's more about the voting rights. And if there was a different mechanism that was available to us. We may have use that, but we had many experts look at it over an extensive period of time and we were not able to to come up with something that would enable us to do that.

[Podcast Host]

We are speaking with Robin Denham, Chairperson of the Tesla Board of Directors, of course. And Robin, what's so interesting is Elon's made very clear why he wants influence. And in the earnings call he was saying he's worried about this army of robots that he is creating and then not having the influence if something went untoward. His concerns about I have been well documented. But why is he the right person to have influence, to have more than 20, 25% voting control?

[Robin Denholm]

I think there's not another person on the planet that has the skill set that Elon has, both in terms of the manufacturing prowess that we've developed and he has developed over many years, but also around AI that, that clone confluence of those technology skills. I think there are very few people that have that. And therefore, obviously looking at the, the risks associated with new technologies and technology and risks that haven't even yet emerged around those technologies, I think he is the right person not only to take advantage of the opportunities for the company ahead of us, but also to make sure that there are not the pitfalls of new technologies that could happen. Obviously, the board plays a role in that as well. And from a governance perspective, looking at the types of evil that could be done with different types of technology is part of our purview as well. And it is why we have such a phenomenal board with the skill sets that we have, both from a technology perspective perspective, but also from a governance perspective. And so we play a role, but obviously the CEO, the management team, play an even bigger role on safeguarding companies. And safe safety is a huge priority of ours as a company. And so when you're developing new technologies, technologies that other people have not yet developed globally, it is important to make sure that you have the right framework in place.

[Shareholder/Interviewer]

Robin, final question from the shareholder base is did the situation around the 2018 package, Chancery, Delaware situation, mean that the board had to hold off on authorizing any other investments or big strategic shifts?

[Robin Denholm]

No, I don't think so. I mean, obviously we take into account a whole bunch of factors as we're working through strategy and, and different alternatives the company has ahead of us. But, but clearly the Delaware situation was disruptive, but not disruptive from a strategic point of view, making sure that we have have an eye on the future and the evolution of the company over the long term. I think is something that the board is focused on, but also something the management is focused on.

[Shareholder/Interviewer]

Robin Denholm, Chair of Tessa's Board. Thank you very much.

[Robin Denholm]

Thank you.

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