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Tesla can exist without Elon but the company needs him right now, board chair says

Ana Altchek   

Tesla can exist without Elon but the company needs him right now, board chair says
  • Tesla board chair argues Musk's leadership is needed at the company right now, in a CNBC interview.
  • Musk is the only one who hasn't been paid out for Tesla's "tremendous growth," she said.

Tesla CEO Elon Musk's controversial pay plan is just a week away from being voted upon.

As the pending vote heats up with advocates on both sides speaking out to sway voters, the situation begs the question: is Musk's leadership essential to Tesla's success?

Tesla board chair Robyn Denholm thinks so — at least for now.

The board chair said in an interview on CNBC's "Squawk Box" on Thursday that Tesla "can exist" without him, but "the right thing for Tesla at this time is for Elon to continue to be at the helm."

The company is at a critical point in terms of building its AI capabilities with the advancement of autonomous vehicles, Tesla's supercomputer Project Dojo, and its development of a humanoid Tesla robot named Optimus. Elon Musk recently said in a post on X that Tesla would spend around $10 billion this year in "combined training and inference AI."

The board chair said "tremendous value" has been created at the EV giant over the last six years, and though the Tesla team was instrumental to it, Musk was at the forefront of that growth.

Delholm said shareholders have profited from the stock growth and customers have benefited from "tremendous innovation." Meanwhile, she said the only person who hasn't been paid is "the leader of the company, Elon."

Musk's pending compensation package, which was struck down by a Delaware judge, depended on the completion of ambitious goals laid out in 2018. It includes a grant of 12 tranches of stock options that are vested when Tesla hits specific goalposts.

When the company hits each target, Musk gets stock equal to 1% of outstanding shares at the time of the grant. Tesla said it reached all 12 milestones by 2023.

But since that pay package was shot down, Musk has openly flirted with paying less attention to Tesla and focusing on his other companies.

Musk said in a post on X in January that he was "uncomfortable" expanding Tesla's AI and robotics development without 25% control of the votes. The Tesla CEO currently has about 13%, according to company filings.

Until then, the CEO said he would "prefer to build products outside of Tesla" — and that's exactly what he's doing.

As the leader of X, xAI, The Boring Company, and SpaceX, the billionaire has no shortage of projects. News broke on Wednesday that Musk may be building a supercomputer gigafactory for xAI in Memphis. He's also been advancing projects for SpaceX with test launches of Starship.

As concerns arise over Musk's leadership at Tesla, it's worth noting that even Musk himself has said he doesn't plan to be CEO forever, according to a 2021 report from Teslarati.

"Now obviously, nobody is or should be CEO forever," Musk said in a 2020 fourth-quarter earnings call. "So I don't expect to be — like the sheer amount of work required to be CEO of Tesla is insane."

Denholm said ratifying the compensation plan is about Tesla's need for Musk's leadership at this moment.

Tesla is currently valued at about $556 billion. Musk has been with the carmaker for 16 years and took over as CEO in 2008 when the carmaker was close to bankruptcy. Since then, it's become the top EV company worldwide, and its skyrocketing value has generated most of Musk's fortune.

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