Control of Tesla is at stake in vote on Elon Musk's pay

Musk’s supporters say he may quit if shareholders don’t approve a trillion- dollar package. Some investors say it’s excessive and would give him too much control, writes Jack Ewing from New York

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Tesla's shareholders will decide this week whether the automaker should award its chief executive, Elon Musk, stock worth almost $1 trillion if he achieves a series of impossible-sounding goals.

But there are big questions about how tough those goals really are.

Mr Musk would acquire voting control over nearly 29% of Tesla shares if he met all of the targets in a 10-year performance plan. Among other things, the company would have to deploy one million humanlike robots and boost its stock market value to $8.5 trillion from $1.4 trillion today.

That sounds difficult. But the plan would also allow Tesla’s board of directors to grant Mr Musk a portion of the shares even if he fell short. Some corporate governance experts said the board, which includes Mr Musk’s brother and several longstanding friends and business associates, could award him shares regardless of his performance.

“These are not independent decision-makers,” said Dorothy Lund, a professor at Columbia Law School who teaches and writes about corporate governance.

She cited a Delaware court decision that struck down a previous pay plan for Mr Musk in part because the judge found that many Tesla directors were too close to him personally or owed their wealth to him.

Tesla has criticised that decision as violating the will of Tesla shareholders, who approved the earlier plan by large margins twice. The Delaware Supreme Court is expected to rule soon on the company’s appeal.

Tesla’s board is “very active, very independent, and I think the outside world doesn’t appreciate it,” Robyn Denholm, the board's chair, said in a September interview with The New York Times.

Supporters of Mr Musk said the board should have some leeway in awarding shares because markets and technology could change. They also contend that they don’t believe that he would be given shares he had not truly earned.