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Tesla Board Warns Shareholders: Approve Musk’s Record Pay Deal—or Risk Losing Him

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Tesla’s board of directors has issued its starkest message yet to investors: approve CEO Elon Musk’s nearly $878 billion stock-based compensation package—or risk his departure and a potential collapse in Tesla’s market value. Shareholders are set to vote on Thursday in what is shaping up to be one of the most consequential corporate pay decisions in history.

The proposal ties Musk’s potential payout to Tesla reaching an $8.5 trillion market capitalization over the next decade, a goal that would make him the first CEO in history to earn close to $1 trillion. Even if he falls short of some milestones, Musk would still collect tens of billions in stock awards.

Supporters argue that Musk’s leadership and vision justify the extraordinary package, crediting him with transforming Tesla into a $1.5 trillion company that dominates the electric vehicle sector and is pivoting toward artificial intelligence, robotaxis, and humanoid robots. “If the stock goes up sixfold, I’ll make a fortune too,” said investor Nancy Tengler. “Why should I care what Musk makes if he delivers?”

Critics, however, see the deal as a governance nightmare. The California Public Employees’ Retirement System (CalPERS) and Norway’s sovereign wealth fund have both announced they will vote against it, citing the concentration of power and shareholder dilution. Corporate governance expert Charles Elson said the board was being “held over a barrel by a superstar CEO.”

Board Chair Robyn Denholm has defended the deal, warning shareholders that without Musk, Tesla could “lose significant value.” Harvard professor Krishna Palepu argued that the proposal aligns Musk’s interests with shareholders, as he must achieve substantial growth before collecting the payout.

The outcome may hinge on Musk’s own 15% stake, which Texas law allows him to vote—unlike under Tesla’s prior Delaware incorporation. Critics say this, along with Texas’ new litigation rules that make it harder for investors to sue, stacks the deck in Musk’s favor.

“The board is facing a classic holdup,” said Cornell law professor Charles Whitehead. “They’ve bet the company on one man—and have no plan if he walks away.”

Tesla Asked by Texas Democratic Lawmakers to Delay Robotaxi Launch

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A group of Democratic lawmakers from the Austin area has asked Tesla to postpone the launch of its robotaxi service until September, when a new autonomous-driving law is expected to take effect. The letter, sent on Wednesday, argues that delaying the rollout is in the best interest of public safety and would help build trust in Tesla’s operations.

Tesla CEO Elon Musk had indicated the robotaxi launch could happen as early as this Sunday. However, if Tesla moves forward with the launch this month despite the lawmakers’ request, they demand detailed information on how the company will comply with the new state law.

Last year, Musk shifted Tesla’s focus toward autonomous-driving technology, moving away from rapid growth in electric vehicle sales. Tesla has not commented on the lawmakers’ letter.

The influence of the request is uncertain in Texas, a state governed by Republicans holding majorities in the legislature.

Musk announced in January that Tesla planned to offer autonomous ride-hailing in Austin starting in June. Investors and analysts have closely monitored this rollout, seeing robotaxis and humanoid robots as critical to Tesla’s future market value.

Currently, Texas law permits autonomous vehicles to operate statewide if they meet registration and insurance requirements. The new legislation, passed last month but not yet signed by the governor, will require companies to get authorization to operate and allows authorities to revoke permits if driverless vehicles endanger public safety. It also mandates providing guidance to first responders on how to handle these vehicles in emergencies.

Tesla has provided few details on the launch, stating it will start with 10 to 20 Model Y vehicles operating only in parts of Austin deemed safest. Information about passengers, pricing, operational zones, and remote monitoring remains undisclosed.

US Supreme Court Grapples with Texas Online Porn Age-Verification Law

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The U.S. Supreme Court is currently deliberating on a Texas law that mandates online pornographic websites to verify users’ ages to curb minors’ access to adult content. This case is of particular significance as it tests the balance between protecting minors and safeguarding First Amendment rights to free speech.

Legal Background

The case is an appeal from the Free Speech Coalition, a trade group representing adult content creators and distributors, who argue that the law violates free speech rights. The Texas law, enacted in 2023, requires websites with more than one-third of content deemed “sexual material harmful to minors” to verify that users are over 18 before granting access. This includes the submission of personally identifiable information, which the coalition claims could expose adults to risks such as identity theft and data breaches.

The Justices’ Concerns

During oral arguments on Wednesday, justices expressed concerns about both the potential harms to minors and the burden placed on adults. While agreeing that states have a right to protect minors from inappropriate material, some justices, such as conservative Justice Amy Coney Barrett, questioned the effectiveness of content-filtering measures compared to the age-verification system. Barrett noted the difficulties in ensuring content-filtering technology works consistently across various devices like smartphones, tablets, and gaming systems.

At the same time, some justices voiced concerns about the potential chilling effect of the law on free speech. Derek Shaffer, representing the Free Speech Coalition, argued that the Texas law could make it more difficult and expensive for adults to access constitutionally protected content. He also warned that applying the lower court’s lenient review could pave the way for more regulations that could restrict online speech.

Societal Impact and State’s Defense

The Texas defense team argued that the law is necessary due to the widespread and easy access that children have to harmful pornography through devices. They emphasized the potential long-term societal damage, citing graphic and violent depictions of abuse that children can easily access online. Justice Kavanaugh questioned the Free Speech Coalition’s lawyer, Derek Shaffer, asking whether the societal problems caused by children’s access to pornography could be denied.

Liberal Justice Ketanji Brown Jackson raised concerns about the extent to which a state could burden adults with age-verification requirements, questioning whether such mandates could place unreasonable obstacles for users.

Broader Implications

This case is one of several across the country, with 19 similar laws enacted primarily in Republican-led states concerned about the impact of online pornography on minors. While the Supreme Court appears to agree that states can take steps to protect children, the core issue revolves around how these laws intersect with First Amendment protections and the right of adults to access legal content without undue burdens.

The Court is expected to rule on the case by the end of June 2025, with implications not only for online porn regulation but for broader free speech and privacy concerns in the digital age.