Tesla Inc.’s chair insists no one other than Elon Musk is capable of leading the company’s transition into artificial intelligence and robotics — but it’s possible he won’t do it from the CEO’s seat.
“He is a generational leader,” Robyn Denholm said Friday on Bloomberg TV. “There aren’t any other people out there like Elon who can actually lead the company over the next decade or so.”
The longtime board member offered the emphatic endorsement of Musk as part of a wide-ranging interview spelling out Tesla’s succession-planning process and detailing a massive proposed compensation package for the chief executive officer. Denholm also acknowledged the possibility of Musk moving into another leadership post such as chief product officer, saying that is “contemplated” in the pay plan.
The board last week revealed an unprecedented compensation agreement with Musk potentially worth around $1 trillion. The package, which will be put to a shareholder vote in November, includes a set of benchmarks he must achieve over the next decade to receive the full payout, including expanding the robotaxi business, delivering 20 million electric vehicles and dramatically boosting Tesla’s market value.
The incentives aim to keep Musk’s focus on Tesla while the company pursues growth in newer markets including robotics and AI. Musk, who has served as Tesla’s top executive since 2008, oversees four other companies: SpaceX, xAI, Neuralink and the Boring Co.
While Musk will remain involved with outside companies, Denholm said he has shown he can still produce results for Tesla.
“It is how he’s delivered in the past,” she said. “From our perspective, actually having his creative energies in various endeavors that are outside of Tesla actually helps Tesla.”
The automaker’s proxy filing this month included a non-binding proposal to take a stake in Musk’s xAI startup, an idea Musk previously discussed. The two companies already work together, integrating xAI’s Grok into Tesla vehicles, and have agreements for xAI to buy Tesla’s Megapack battery storage systems.
Musk has increasingly bet Tesla’s future on robotics, AI and driverless vehicles, with the CEO saying this month that Tesla could derive 80% of its long-term value from the Optimus humanoid robot. Tesla is also working to expand its nascent robotaxi business while sales in its core EV business decline in many major markets around the world.
Demand has been hurt by Musk’s heavy involvement in the political sphere, including playing a role in President Donald Trump’s administration earlier this year. That damaged the company’s brand and generated a fierce consumer backlash, along with incidents of vandalism to Tesla showrooms.
Tesla shares traded up 6.2% as of 12:29 p.m. Friday in New York. The stock declined 8.7% this year through Thursday’s close, while the broader S&P 500 Index climbed 12%.
More Control
The compensation proposal, revealed in a Sept. 5 regulatory filing, has the potential to expand Musk’s holdings in the automaker to at least 25%, a level he has publicly stated that he wants to reach. If Musk receives the full award his total stake would be worth more than $2 trillion.
The CEO’s prior pay agreement from 2018, which was valued in excess of $50 billion, was struck down by a Delaware court. While the company appeals that decision, the board is seeking other ways to compensate its CEO, including with an interim stock award in early August valued at about $30 billion.
Succession-planning has become a more prominent issue for Tesla as Musk has agitated for the larger stake, suggesting in public comments that he could pursue AI and other endeavors elsewhere without greater control at the company. Tesla acknowledged in its proxy filing that Musk made “genuine” threats to quit if he didn’t receive assurances around control and being paid for past services.
Musk told Bloomberg in an interview in May that he’s committed to still being at the helm of Tesla in five years.
Denholm on Friday said CEO succession is “probably my No. 1 question that I get” from investors. She said there’s a contingency plan if Tesla suddenly needed a new leader, and that there’s a longer-term process for finding a true successor to Musk, which was built into the compensation package.
“We want to make sure that we have the right leaders in place to do an orderly transition at some point in the future,” Denholm said. “And so making that part of this plan was a very deliberate activity.”
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
