Tesla Board Chair Robyn Denholm 10/27/25

0:00Bring in show music, please. Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod. Tesla chair Robin Denholm, shareholders in the EV company and shareholder proxies are gearing up for a vote next week. The big item on the docket, Elon Musk's trillion dollar compensation. Shareholders get their return much earlier than Elon would if he delivers against the plan. And secondly, it really does make sure that the economic value is an incentive for him to stay at the company and continue to deliver. And special sweet delivery from a robot? I've been in the lab with Optimus. He can fold laundry. He can wipe the table down really well.

0:46He can hand things to you. You can actually shake hands with him. The French jewel thieves nabbed on their way out of the country. It's like Ocean's Eleven, except for they got caught pretty quickly. Plus, the president in Asia reworking a trade deal with China, our Eamon Javers reports. This does not seem like a deal that is done and finalized yet. It seems like it is still a work in progress, but they do seem optimistic. And a big deal for the creator of the hit Yellowstone universe to jump from Paramount to NBC. Spin-offs to Yellowstone are my favorites. Those were good. Lioness, too. Lioness.

1:23It's Monday, October 27th. Squawk Pod begins right now. Stand Becky by in 3, 2, 1. Cue, please. Good morning, everybody. Welcome to Squawk Box right here on CNBC. We're live from the NASDAQ market site in Times Square. I'm Becky Quick, along with Joe Kernan and Andrew Ross Sorkin. And here we go. It is a Monday morning. I say it truly. Everything you touch turns to gold. and you can be very proud of it. Other parts of the world are not like this. They're very special people and it's a very, very special place. Thank you very much. It's a great honor to be with you. Thank you. President Trump arriving in Tokyo about two hours ago, this after signing a trade in minerals agreement with Malaysia and Cambodia and frameworks now for a trade deal with Thailand and Vietnam as well.

2:17CBS's Amy Jowers is live for us this morning in Washington with the latest on where this is all headed ahead of hopefully a meeting with President Xi soon. Yeah, that's where we might end up at the end of the week, Andrew. President Trump arrived in Japan this morning after a whirlwind weekend in Malaysia, where he reached trade and mineral deals, as you say, with Malaysia and Cambodia, and set up those frameworks for trade agreements with Thailand and Vietnam. Now, in Tokyo, the president began with a courtesy visit with the emperor and is later going to have a meeting with the new Japanese prime minister, Sana Takeichi, who is the first woman to hold that role in Japanese history.

2:56Now, on Air Force One, President Trump spoke extensively with reporters, but he said he didn't want to share details of what officials are calling a framework economic agreement between the United States and China that could be signed by President Trump and Chinese President Xi Jinping later this week. I don't want to tell you what the understanding is because what we understood yesterday or two days ago or even today is not going to be necessarily what it's going to be in two days. We're going to have a great talk. I have a lot of respect for presidency. I like him a lot. He likes me a lot, I believe, and respects me.

3:30And I think he respects our country. Indicating there that the trade talks are somewhat of a moving target. Now, speaking to NBC's Kristen Welker, Treasury Secretary Scott Besant yesterday sounded an optimistic note on those Chinese negotiations, arguing that the president's tariff threat has helped to get a deal. President Trump, a great deal of negotiating leverage with the threat of the 100 percent tariffs on November 1st. And I believe we've reached a very substantial framework that will avoid that and allow us to discuss many other things with the Chinese. I think we will be able to discuss them helping us get this terrible fentanyl crisis under control.

4:14I think we are going to be able to discuss substantial soybean and ag purchases for our American farmers. I think we are going to be able to discuss more balanced trade. Now, in addition to his meetings with political leaders in Japan today, President Trump is also expected to attend a dinner with business leaders there. The White House has not provided us a list of the attendees, but it is expected, guys, to be a who's who of the Asian business elite. Back over to you. So question for you. When they talk about a framework, I mean, a lot of the things that Secretary Besson was talking about was we've set up the parameters to have a conversation about these issues as opposed to we've agreed on these issues.

4:56In fact, when Kristen Welker was sort of pushing him on the issue of soybeans, for example, and just how big a piece of our market they are as purchasers, or at least historically have been, what that ultimately looks like. How optimistic do you think the market and investors and just the public should be about where these talks really go? Yeah, I mean, that's the big question as we head into the rest of the week. You know, this trip is certainly underway. There clearly were meetings throughout the weekend between Besson and his Chinese counterparts. And that's why I played that clip of President Trump on Air Force One, Andrew.

5:33You know, he's saying he doesn't want to talk about the details of what's in this framework because his understanding, you know, yesterday might not be the same as today, might not be the same as tomorrow. That, to me, indicates, you know, very much a moving target in terms of these negotiations. This does not seem like a deal that is done and finalized yet. It seems like it is still a work in progress, but they do seem optimistic that they will get there by the end of the week when the president is scheduled to sit down with Xi Jinping. Nothing can really be finalized, finalized until those two leaders meet in a room.

6:03But the goal here is to set up as much as you can for success by the end of the week. The president was asked on Air Force One about a TikTok deal. Remember, he's announced that deal previously. The president was asked about it on Air Force One. He said maybe we'll get a TikTok deal as well. So a lot of pieces here still need to fall into place between now and the end of the week, I think. Hey, Eamon, the question on rare earths, I think, is a big one, too. This idea that this is going to be not a decided situation, but maybe a respite. Maybe we get to look at this and think that they're going to think about this for about a year and leave things at status quo until then.

6:42Yeah, the expectation is that the Chinese would lift their export controls in some form or fashion as part of this deal. What form and fashion that ends up taking, that's sort of up in the air. And at the same time, the president's trying to do those negotiations with the Chinese. He's also very quickly trying to secure rare earth supplies elsewhere, including in the United States, he has said. And the key there is the processing bottleneck. You know, can they process outside of China in an economic way? And so the president's been taking steps, you know, aggressively around the world to try to, you know, reshore or at least differently offshore the rarer supplies from someplace else other than China.

7:24And in the short term, though, they do hope to get that export control situation cleared up by the end of this week. But again, that's one of those moving parts that seems to still be moving right now. OK. Eamon Javers, thank you, sir. President Trump says he's imposing an additional 10 percent tariff on imports from Canada in retaliation for running a TV ad featuring former President Ronald Reagan criticizing tariffs. The president blasted Ontario's provincial government for waiting until after the first two games of the World Series to pause the Reagan ad. He called it dirty play, but said, I can play even dirtier than they can.

8:04Ontario Premier Doug Ford said Friday he would pause the ad beginning today but allow it to play over the weekend so it could air during the first two World Series games, which it did. Trump halted trade talks with Canada last week arguing that the ad misrepresents President Reagan's position on trade by editing out some comments in which he defended imposing tariffs, select tariffs on Japan, and emphasized the importance of maintaining the presidential authority to do so. Mark Carney, the federal head of Canada has tried to distance himself somewhat from the Ontario government's move. I think the one thing that it does do, though, is highlight the volatility in all of these trade talks.

8:49And while we feel great about where we stand with China right now, as it looks like they're heading into this meeting with a lot of things worked out, with both President Trump and President Xi, all of these things are volatile. We thought we had the rare earth situation worked out before. It's just a moving target. And, you know, at any point, if they are unhappy with the way things are unfolding, they can change their mind. But, Joe, you were right. Even when it didn't look like things were great, we were 1 % or 2 % from all-time highs. So it doesn't put an extreme amount of pressure on the markets.

9:23It does increase volatility. And right now we're at 15.15 on the VIX, which is not super high. but you see those little spikes along the way. And the president's probably his new favorite baseball player is Yoshinobu Yamamoto, I would say, because, you know, I'm not having grown up in Cincinnati. It's tough to love the Dodgers. But this guy, second complete game in a row in the postseason, hasn't been done in a long time and just blanked, basically blanked Toronto to even the series at 1-1. And now I'm kind of, I guess we're benign blue. Love the blue, love the Dodgers. You're just trying to not talk about what happened with Cincinnati and the Bengals.

10:04That was something. A landmark media deal with TV and film producer Taylor Sheridan. He signed an agreement to join NBCUniversal when his contract with Paramount expires. Multiple reports are indicating this. He's known for TV hits, including Yellowstone and its spinoffs of Yellowstone, Tulsa King and Landman and others, Mayor of Kingstown. He's got he's got a formula that I don't know what works. I like I know I like everything. I'm not sure exactly what that means. Spinoffs to Yellowstone are my favorites. Those were good. Precursors. Although this was so Lioness. You remember that too? I didn't even know that too.

10:50Yeah, he did that too. He is prolific. A lot of violence. He is. A lot of violence and drama. Actually, I like Tulsa King, too. Tulsa King is good. Merrick Kingstown was awesome. Jeremy Renner. I only watched the first half of the first season. It says here Sons of Anarch yet. Was that really him, too, completely? Which I also liked. Although, I like Charlie Hunnam so much, and he just plays the biggest freak in the... Man, that is a win for the home team. For our home team for the next couple of months. What's that? Apparently, he's going to do all of these shows that are on. Paramount's still till 2029, at least.

11:23Yeah, he's under contract till 20. Right. Yeah. But the deal with NBC. But he's young. He's 55. And he's in Yellowstone. He's riding, doing all the crazy stuff on the horse. His deal with NBCUniversal includes creating TV content for both NBC and Peacock and creating films for Universal Pictures. Of course, NBCUniversal is owned by Comcast, which is in the process of spinning off of some of its assets. I was including this network. I was laughing about it. They're getting rid of us and gaining him. Yeah, exactly. I guess it's a fair trade for them. Cheese will be next. Coming up on Squawk Pod.

12:04We have Tesla's cyber cab sitting just outside the NASDAQ this morning, along with an optimist robot that is handing out candy. Tesla Chair Robin Denholm bringing the whole show to Times Square as she joins us for a special interview. The company is preparing for a shareholder vote on Elon Musk's unprecedented pay package. She says he's worth it. We're changing transportation with AI and we're changing the way households will work and how workplaces will work with robotics.

12:42Welcome back to Squawk Pod from CNBC. This morning, right outside our TV set in New York, a Tesla cyber cab and a Tesla humanoid robot, Optimus. It had arms, legs, everything, attracted tourists and others in Times Square. Let's get to Becky. She has ventured outside into Times Square with the Tesla cyberculture. Yeah, we have this free candy. Optimus Robot out here, he's giving free candy out, and you know, I'm shocked he's not mobbed out here in Times Square. Hi, how are you, dude? Good to see you, man. Oh, high five, air five? Oh, good. Boom, boom. I'm not allowed to touch, I'm told. But could I have some candy?

13:23Q said Robot, handing our Becky Quick a package of sweets from a nearby bowl. Thank you, man. Thank you very much. By the way, these are gummies. I'm told there's no THC in them. Both technologies, those big cyber trucks and the robots, are key to Tesla's future. Now, let's get back to Andrew. This morning, we've got a big interview for you. Tesla's annual shareholder meeting is next week, where investors in the company will vote on a new pay package for CEO Elon Musk. Could grant him nearly a trillion dollars more in stock. And joining us first right now on CNBC is Tesla's board chair, Robin Denholman.

14:00We're thrilled of her and the entire Tesla operation outside there with the Optimus robot, the robo taxis and everything else. Robin, it's good to see you. Thanks for joining us. Great to see you as well, Andrew. So help us understand. We just saw what you put out this morning, effectively saying that shareholders need to vote in favor of this compensation plan to compensate Elon Musk and to make sure that he remains the CEO of the company. Make the argument for us, in part because I should note that, you know, some of the firms like ISS and Glass Lewis, these firms, have actually told shareholders the opposite.

14:42They've said vote against this plan. There have been others that have said that effectively Elon Musk is holding the shareholders hostage. You've you've been with your board sitting discussing this and you believe that this is in the best interest of shareholders. Why? Well, Tesla's in a transformative stage at this point in time where we're leaning in very heavily to the AI space in terms of both the vehicles, in terms of FSD, but also in terms of Optimus and the robots, as you can see here in New York today. And so for us, we sat back as a board and actually determined that this is the right time to lean into that transformation and for Elon to lead that transformation.

15:30And we then formed a special committee to actually determine what the right incentive program was to have him motivated to deliver unprecedented value for shareholders over this next decade. And so what do you tell shareholders who say, this just seems like too much money? He's already incentivized. He owns a big chunk of the company already. I mean, that would be the pushback, right? Well, it's a performance plan. If he doesn't perform against the milestones, both in terms of the market cap and the operational milestones, he actually gets nothing. He doesn't get any salary or any equity unless he actually performs and achieves the milestones that are in the plan.

16:10That is the basis of this performance plan. Look, you know, I've argued this is this is the greatest pay for performance plan that exists, as was the previous one, which was struck down. I want you to listen to this. This was Elon Musk addressing the upcoming vote during a call last week on the quarterly results call where he he discusses some of this. I just don't feel comfortable building a robot army here and then being ousted because of some asinine recommendations from ISS and Glass-Lewis who have no frigging clue. I mean, those guys are corporate terrorists. And the problem, so let me explain the core problem here is that so many of the index funds, the passive funds, vote along the lines of whatever Glass-Lewis and ISS recommend.

17:06Now, they've made many terrible recommendations. So, Robert, how much of this is about incentivizing Elon? Because it sounds like to me more than anything, he believes that he actually worries about AI in the future and wants to have greater control of the company. And how I'm curious the board thinks about that. Yes, he's been very consistent in that view in terms of having enough influence over the vote of Tesla in the future so that bad things can't happen with the AI. So it's less about compensation and more about the voting influence in terms of this. And that was very clear as we were negotiating from a special committee perspective in terms of this performance package and if there was a way of delivering the the vote without the actual compensation we would have done that but but from our perspective there was no way of doing that so you can you do that with a voting shares that have a like a super majority vote you can but you can only put them in place before you IPO and so that's why some of the other technology companies have those in place but we we had many experts advising us and having a look at that exact question.

18:25Could we do that? And we ultimately couldn't. But what we have done in the plan is we've bifurcated the voting rights versus the economic value. He doesn't get those economic values till at least year seven and a half, even if he delivers them in the first five years. And so that's one of the features of this plan. Firstly, shareholders get their return much earlier than Elon would if he delivers against the plan. And secondly, it really does make sure that the economic value is an incentive for him to stay at the company and continue to deliver for quite some time in the future. Hey, Robin, right now, you've got a market cap at Tesla north of$1.4 trillion.

19:13What would Tesla be worth without Elon Musk, do you think? Yeah, well, that's the whole question, which is why we're asking shareholders to vote. We're at this important inflection point. You know, there is nothing wrong with being just a car company. There are plenty of car companies out there. We think we deliver great cars out into the marketplace. But the opportunity for Tesla in the future, given this AI focus and attention and the unique capabilities that we have as an organization and that Elon brings to us, really does mean that the opportunity for the company ahead of us is significant.

19:56And that's how this performance plan has been put together. Do you think it's worth half what it's worth right now without him? It's very hard to tell, but there is definitely a premium there because of the unique capability that he brings to the company and the opportunity that we have as a company ahead of us. Robin, one of the questions is... It'll never be an old-style company, I guess, Robin, where I'm looking for some new models. I mean, if you're going to that, you don't need a sexy new model for me, do you? The first one was so great, the Model S, obviously, the style and everything about it.

20:32Still a great car. It is. Is there any way I can hope for some really cool, I don't know, is a Roadster a new one coming? It's on the roadmap. It's on the roadmap. Do you have any, can you describe it to me? Is it bigger than a brand? I'm not going to announce products here. But if you're doing all this, maybe you don't need to do what we've always done, you know, a new Mustang. You don't need the old way we think of American cars. Yeah, I mean, Elon talked about that last week on the earnings call. You know, leaning into FSD and actually AI in the vehicles has actually been the focus over this last period of time.

21:13The integration of that with a really purpose built vehicle for autonomy is actually really important, which is why you see the cyber cab. And again, the vehicles that we have on the road today are great vehicles using full self-driving as well. Hey, Robin, you know, one of the questions that shareholders seem to ask is, how can you guarantee that you're going to be able to capture and get all of Elon's attention? Obviously, you know, he's a renaissance man of sorts in that he has various interests and lots of different businesses, including SpaceX being the other biggest. And how much you think that you have to incentivize him economically to to keep his eye on Tesla or if it should be contractual?

22:04How have you thought about that distinction? Yeah, I mean, I think the plan speaks for itself on that that front. He can't deliver against the plan without the focus and attention. The goals that we have in the plan around market cap to get to$8.5 trillion, more than many companies out there combined today, is actually a significant set of goals that he has to achieve. And he has to actually focus on Tesla to achieve those. And so and delivering the operational milestones, both in terms of products, but also in terms of a 400 billion dollar EBITDA number. That is an enormous task for anyone. And for Elon, he is motivated by doing things that other people can't do or other companies can't do.

22:57And that was very much in the forefront of how we constructed the plan. Robin, one of the other things you put on the table, which I actually imagine is partially to incentivize Elon as well, is the possibility of taking a stake in XAI, which, of course, this is other business connected to X. Of course, I shouldn't say of course, but given the way ISS and Glass Lewis and others have been pressing, they're saying this shouldn't happen, that this would be a conflict. How does the board think about that? Let's say that shareholders approve the idea of considering that stake. When you think about to the extent there is a conflict, how do you think about it?

23:37Yeah, well, firstly, it is a shareholder proposal. And what that means is that the company didn't put the proposal on the proxy. It was actually submitted by shareholders. We received a number of them. And actually, this was the most common proposal around XAI to take a minority stake or at least vote on that. We as a board want to hear shareholders' points of view. From our perspective, shareholder primacy is a very key principle that we've had on all of our topics, this one included. Now, that does not mean that as a board we would just do what the shareholder vote comes in at. We would then assess if it's a four vote to take a minority equity position.

24:21We would, as a board, examine that and look at the benefits for shareholders to do that. And we would do it in the same way that we do other related party type of transactions. We have a very robust related party transaction process at the company. The audit committee oversees that and those transactions are disclosed. Now, obviously, taking an equity stake is different to other transactions, but we would take the same fiduciary responsibilities very seriously if that were to happen. But again, it's a shareholder proposal. We will see what the vote comes in at, and we'll take that into consideration as the board reviews that proposal.

25:05Hey, Robin, I don't know if you saw this, but I wanted to ask you about it. Adam Jonas, the analyst, out with a note this morning. He says, I'm calling it, autonomous cars are solved. When I say solved, do I mean six or seven nines to the right of the decimal? No, perfection never, but enough to pull the safety driver at scale in metro and major metros. He says if Elon pulls the safety driver with a camera only robotaxi in Austin, that would be a very big deal. And from our discussions with Tesla, it appears the only thing preventing Tesla from pulling the driver is its own abundance of caution.

25:38What do you think of that? Well, we are being extremely cautious. Elon talked about it last week on the earnings call as well. safety is our number one priority for the vehicles per se and it has been from the beginning and introducing full self-driving into the robo taxis and also into everybody's vehicles today means that we take a very cautious approach in terms of delivering that and the robo taxis are no different. Making sure that there is a safety driver in the passenger seat is one of the ways that we demonstrate that in terms of being super cautious. But how close do you feel you are to taking the driver out and also just rolling this out to even more cities?

26:29Here you are sitting in New York City right now. I'd love to sit in a robo-taxi there. We haven't got them yet? Yeah, obviously, there's also regulatory hurdles that you have to make in any city and you have to comply with all of the local regulations. And so the team is very focused on city by city, making sure that we're meeting all of the regulatory standards and that we actually then bring the vehicles to that city. And so, as you can see from the performance package, there's a lot of robo-taxis that we envisage at some point over the next decade in terms of having a million robo-taxis out there as one of the goals that Elon needs to hit.

27:15Hey, Robin, you are such an interesting person and you're in such a unique position, I think, as chair of Tesla, to be working with Elon Musk, to have the pressures that have come from the Delaware court decision, to be dealing with shareholders on all of these things. What's the hardest part of your job? Well, I think all of the directors at Tesla are very hard working. I couldn't ask for a better board, actually. And everybody pitches in. We work with the management team. We're on calls all the time. You can see from the proxy, we had 58 meetings over this last year. You have a lot of stuff.

27:58What other company has that? And so from my perspective having the right board to govern a company that is as unusual as Tesla is really important which is why we're asking shareholders to vote for the three directors that are up for reelection this year what's different now that Elon has left the government and come back well obviously the outside perspective of him spending more time at Tesla. That perception obviously is diminished a little bit in terms of that. He is very much front and center and has been for quite some time. And it is enabling us to continue to focus on the business of Tesla and for the employees to to feel that as well each and every day.