Elon Musk could potentially leave Tesla if shareholders do not approve his $56 billion compensation package, according to board chair Robyn Denholm. Denholm emphasized that Musk could divert his attention to other ventures if the compensation plan is rejected, as reported by The Verge.

On June 13, Tesla shareholders will vote on Musk's pay package for the second time. Earlier this year, a Delaware court invalidated the initial approval, citing significant flaws in the process.

In a letter to shareholders filed with the Securities and Exchange Commission, Denholm highlighted Musk's unique role and the necessity of an unconventional compensation approach. "Elon is not a typical executive, and Tesla is not a typical company. Therefore, standard executive compensation models are inadequate for Tesla’s needs. Motivating someone like Elon requires a different strategy," she stated.

Denholm noted that Musk has limited time and numerous ideas that could impact the world significantly. She stressed the importance of keeping Musk’s focus on Tesla for the benefit of shareholders, emphasizing the need for mutual respect to achieve this.

Musk’s involvement in other ventures such as SpaceX, X, and xAI has raised investor concerns about his commitment to Tesla. Denholm argued that the $56 billion compensation plan is crucial, not for the money itself, but to maintain Musk’s dedication to Tesla’s ambitious goals. "We all know Elon is among the wealthiest people on the planet, and he would remain so even if Tesla were to renege on the commitment we made in 2018," she wrote.

The 2018 compensation deal aimed to keep Musk focused and motivated to achieve Tesla’s unparalleled ambitions. Denholm stressed the importance of upholding this agreement to retain Musk's attention and drive. "If Tesla is to retain Elon’s attention and motivate him to continue to devote his time, energy, ambition, and vision to deliver comparable results in the future, we must stand by our deal," she wrote.

Additionally, Musk has shown interest in acquiring a 25% stake in Tesla, increasing his influence over the company to further his objectives in AI and self-driving vehicles. He has also threatened to spin off Tesla’s AI research into a separate company if his demands are unmet.

Denholm also urged shareholders to approve relocating Tesla’s base to Texas. While Tesla is currently incorporated in Delaware, Musk has proposed changing its registration to Texas, where the company’s headquarters are now located, according to The Guardian.