Why Elon Musk could leave Tesla, and why it might actually happen | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

The CEO of Tesla may suddenly be the most unpredictable factor in the company.

Tesla Board Chair Robyn Denholm gave a stark warning only days before a key shareholder vote: Elon Musk might leave the firm if investors don’t support his new $1 trillion compensation plan.

The vote on Nov. 6 will decide whether Tesla reinstates a performance-based stock reward that was issued in 2018 but subsequently ruled unfair and improperly negotiated by a Delaware court.

The stakes may be considerably greater this time. The firm is using the idea as both a means to compensate Musk and a way to retain him, stating that his “time, talent, and vision” are essential as Tesla advances into AI, robotics, and autonomous driving.

With investors set to vote on his compensation plan, Elon Musk’s future with Tesla hangs in the balance.

Catuffe/Getty Images

Tesla’s success depends on Elon Musk

The board’s statement suggests that Musk could devote more effort to his other businesses, such as SpaceX, xAI, and The Boring Company, if he doesn’t receive a substantial financial reward.

Investors can’t ignore this: Tesla’s brand, strategy, and market value are all strongly linked to Musk’s public image and actions.

As Musk once put it:

The fundamental value of a company like Tesla is the degree to which it accelerates the advent of sustainable energy faster than it would otherwise occur.

Regardless of how the story unfolds, it will have significant implications for Tesla’s future.

Why Musk’s $1 trillion Tesla package faces new scrutiny

Tesla is not seeking a new contract; management is requesting that an old one be reinstated.

In 2018, Musk’s $1 trillion pay package was tied to significant performance objectives, including achieving market value milestones and operational goals in energy and autonomous driving.

More Tesla:

However, a Delaware court threw out the plan in January 2025, agreeing with a shareholder who argued that it was improperly given to Musk by a board that was too close to him. The court stated that Tesla’s board members hadn’t adequately protected themselves from conflicts of interest or bargained fairly.

That decision put Musk’s status as Tesla’s CEO in legal jeopardy.

Now, the firm is basically holding the vote again, but with more stakes and sharper optics. The board of Tesla says that shareholders, not judges, should make the final decision over whether Musk gets the money.

Denholm’s letter tries to convince investors that the pay offers a way to keep Musk at Tesla. Without it, he would not feel obligated to remain with the company at all.

If Tesla reaches very high growth targets, Musk will get 12 tranches of stock options. One of these goals is to achieve a market valuation of more than $8.5 trillion, surpassing the combined value of multiple Big Tech companies.

Musk’s attention may already be drifting away from Tesla

The board claims it is anxious about keeping Musk focused, but there are hints that his mind is already going in other directions.

Musk has made big efforts outside of Tesla in 2025 alone. His AI business xAI, which was intended to compete with OpenAI and Google DeepMind, raised billions of dollars and secured a major cloud agreement with Oracle.

And even though SpaceX faced some public challenges, including repeated rocket failures and a high-profile dispute with regulators, it has worked harder in response.

Musk is less involved with Tesla these days than he was in the past. He still runs the company as CEO, but he has delegated more day-to-day tasks to lieutenants and only attends product demonstrations or investor calls when something significant is happening.

That’s why this vote is more than just a sign. Tesla’s board is saying the firm might become just one of many Musk priorities, unless shareholders agree to a deal that keeps him financially and mentally tied to it.

That could be enough for Tesla bulls who believe in Musk’s long-term goal.

What happens if shareholders reject Musk’s pay plan?

Tesla won’t lose Musk right away if shareholders vote against the pay deal on Nov. 6, but it might start a steady decline.

The board has made it plain that there is no backup plan. Without a new pact, the $1 trillion stock award remains worthless, and Musk receives nothing from the 2018 arrangement.

He would still own a significant portion of the firm, but he wouldn’t have to remain involved or prioritize Tesla over his other businesses.

That lack of clarity puts investors in considerable danger. People have bet on Tesla’s value for a long time, not only because of its vehicles.

They’ve relied on Musk’s vision, ambition, and capacity to lead the next wave of AI and robotics innovation. If that story loses its strength, the extra money investors pay for Tesla’s shares may disappear rapidly.

Analysts also point to possible consequences on the inside. If there are doubts about the CEO’s commitment, important engineers and executives — many of whom joined to work directly with Musk — may reassess their responsibilities.

It’s not common for a CEO’s personal alignment to have such a big impact on the company’s finances. But the line between brand and leadership is quite thin with Musk.