Tesla's board chair, Robyn Denholm, stated that the company must tackle a daunting challenge as it confronts shareholder votes on its relocation to Texas and Elon Musk's $56 billion compensation package, according to a report by the Financial Times.

Will Tesla Shareholders Approve Musk's $56 Billion Compensation Package 

Denholm, who has led the board since 2018,  recently urged shareholders to reaffirm their support for Musk's massive pay deal, which a Delaware judge rejected in January.

The chair explained that the board is in the early stages of a campaign and plans to engage with shareholders continuously until the vote.

Musk's largest compensation package in corporate America does not include a salary or cash bonus. Instead, it rewards Musk based on Tesla's potential market value rising to $650 billion over the next decade from 2018.

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Tesla's Planned Relocation

Denholm mentioned that the shareholders she spoke to believed the compensation plan was effective and appreciated the value it generated. However, Judge Kathleen McCormick of Delaware's Court of Chancery invalidated the original pay package.

In response to the rejection, Musk has planned to relocate Tesla's state of incorporation from Delaware to Texas, a move that is now subject to shareholder approval.  

READ MORE: Tesla Shareholder Asks Judge to Prevent Elon Musk From Moving Pay Fight to Texas to Evade Delaware Ruling