Tesla Motors is set to hold its annual shareholder meeting after Thursday's U.S. market close, where investors will vote on several proposals—most notably, a decade-long compensation package for CEO Elon Musk. This decision effectively serves as a referendum on whether traditional corporate governance rules apply to the world's richest individual.

**The Stakes for Approval** Elon Musk has warned that he may step down if shareholders reject the proposed pay plan, which could potentially net him up to $1 trillion. Analysts like Cantor Fitzgerald's Sheppard note that over 50% of investors now view "Tesla as Musk and Musk as Tesla," though some believe the company could thrive even without his leadership.

The Delaware Supreme Court is currently reviewing Musk’s 2018 compensation package, which was twice approved by shareholders but overturned by a state judge last year. The new proposal ties Musk’s rewards to ambitious targets, including boosting Tesla’s market cap to $8.5 trillion, delivering 20 million vehicles, securing 10 million Full Self-Driving subscriptions, and producing 1 million robots. Achieving these would grant him nearly 29% ownership, enhancing his control. Unlike prior votes, Texas law now allows Musk to vote his ~15% stake.

Musk recently stated, "I just need enough voting influence to matter—but not so much that I can’t be fired if I go rogue." Supporters, including the Florida State Board of Administration, argue the plan aligns Musk’s incentives with shareholder value creation. As of November 5, preliminary Broadridge data shows ~80% of votes cast, with over 55% in favor.

**Risks of Rejection** Major shareholders like CalPERS and Norway’s sovereign wealth fund oppose the package, citing excessive dilution and over-reliance on Musk. They warn it undermines shareholder voice and governance flexibility. Earlier this year, Tesla’s stock and sales dipped as Musk focused on Washington, rebounding only after he returned—highlighting his outsized impact. Deutsche Bank’s Edison Yu noted, "Leadership risk remains critical given Musk’s role in Tesla’s valuation."

Tesla’s board cautioned that rejection could push Musk to prioritize his other ventures—xAI, SpaceX, Boring Co., and Neuralink. Morningstar’s Seth Goldstein speculated, "He might shift focus to xAI or SpaceX, interpreting a 'no' vote as personal rejection."

**Contingency Plans** Regardless of the outcome, Tesla must prepare for a future without Musk. The proposal’s final clause requires him to draft a succession framework. Chair Robyn Denholm suggested internal candidates like auto VP Tom Zhu could ensure continuity, though no current executive matches Musk’s stature. "Most investors can’t name another Tesla leader," Sheppard observed.

Morgan Stanley warned that rejecting the package may trigger a 10%+ stock drop, seen as a no-confidence vote, while fueling strategic uncertainty and talent attrition risks.