Tesla shareholders have overwhelmingly approved a groundbreaking pay package for CEO Elon Musk, potentially worth nearly $1 trillion over the next decade, contingent upon the company meeting a series of ambitious performance targets. The proposal received more than 75 percent support during Tesla’s annual meeting held in Austin, Texas, signaling strong backing for Musk’s leadership.
Musk, who appeared on stage accompanied by dancing robots, described the initiative as the beginning of a significant new chapter for Tesla, stating, “What we are about to embark upon is not merely a new chapter of the future of Tesla, but a whole new book.” The pay structure, which is unprecedented in corporate history, links Musk’s compensation to specific milestones including the delivery of 20 million vehicles, the deployment of 1 million robotaxis, and achieving a market capitalisation of $8.5 trillion, a substantial increase from its current valuation of $1.4 trillion.
If Musk fulfills all outlined targets, his ownership share in the company could increase by as much as 12 percent, positioning him to control roughly a quarter of Tesla’s total shares. Unlike traditional executive compensations, Musk will not receive a salary but stands to gain over 400 million shares as part of the plan, according to the Financial Times.
While the vote received significant approval, it faced opposition from several entities, including Norway’s sovereign wealth fund and proxy advisory firms Glass Lewis and ISS. Critics raised concerns regarding the implications of such a massive pay package. Nonetheless, Tesla’s board defended the decision, asserting that retaining Musk is crucial, especially as he indicated a willingness to step down if the compensation package was rejected.
The annual meeting was marked by Musk’s characteristic energy, as he quipped, “Other shareholder meetings are like snoozefests, but ours are bangers.” His enthusiasm extended beyond financial matters, as he announced plans to accelerate new projects, including the development of an autonomous humanoid robot named Optimus, the introduction of the steering-free Cybercab, and a next-generation electric sports car. Musk emphasized the need for a “gigantic chip fab” to support the company’s artificial intelligence initiatives and suggested considering a partnership with Intel.
Dan Ives, Managing Director and global head of technology research at Wedbush Securities, commented that this pay plan establishes a framework to keep Musk as CEO through 2030, coinciding with what he termed “one of the most important stages of its growth cycle.”
Conversely, Jessica Strine, CEO of shareholder advisory firm Jasper Street Partners, indicated that Musk’s approximately 15 percent voting stake significantly influenced the outcome of the vote.
Additionally, during the meeting, shareholders approved investment in Musk’s AI venture, xAI. This approval reflects Tesla’s commitment to expanding its technological footprint as it navigates a rapidly changing automotive landscape.
