Tesla shareholders have approved Chief Executive Elon Musk’s record-breaking pay package, a deal that could hand him stock awards worth more than $1 trillion if the company meets a series of targets.
The package, supported by over 75% of investors, is the largest corporate pay agreement in history.
The decision was announced at Tesla’s annual meeting in Austin, Texas, where Musk commended cheers and dancing robots. “What we are about to embark upon is not merely a new chapter of the future of Tesla, but a whole new book,” he told shareholders.
The package is tied to performance milestones rather than a fixed salary. It consists of 12 tranches linked to Tesla’s operational achievements and market valuation.
To unlock the full payout, Tesla’s market capitalisation must grow from about $1.5 trillion to $8.5 trillion over the next decade. Each milestone gives Musk an additional 1% of Tesla’s stock, meaning he could still secure tens of billions even if he falls short of the final target.
The board presented the package as essential for retaining Elon Musk and ensuring long-term growth. “If completed, these tranches of awarded shares follow strong improvements in revenue growth for Tesla,” said Brian Mulberry, senior client portfolio manager at Zacks Investment Management.
“Will the growth offset these concerns of dilution, or, is this just giving Elon his wish of enough influence to shape the future of AI? That remains to be seen.”
Not all shareholders were convinced. Norway’s sovereign wealth fund, along with proxy advisory firms Glass Lewis and Institutional Shareholder Services, opposed the plan, calling it excessive.
Still, supporters argued that Musk’s leadership and vision, ranging from self-driving cars to humanoid robots, remain central to Tesla’s future success.
Tesla Chair Robyn Denholm defended the decision, saying it reflected a turning point for the company. “Tesla is at an inflection point, I think I’ve said that 3,000 times over the last few weeks, and this last year has been a critical one in our history,” she said.
The new pay package replaces Elon Musk’s earlier $56 billion deal from 2018, which was struck down by a Delaware court earlier this year. Since then, Tesla has moved its incorporation to Texas and is appealing the ruling.
During the meeting, Musk outlined a series of upcoming projects, including the production of a steering-less “Cybercab” robotaxi, a new Roadster model, and plans for “a gigantic chip fab” that could involve a partnership with Intel.
He also insisted that the package is less about personal wealth and more about securing enough voting control to drive Tesla’s next phase of innovation.
Shareholders further approved the re-election of three board members, backed annual elections for all directors, and endorsed Tesla’s investment in Musk’s AI startup, xAI. Some abstained, signalling concerns about potential overlap between Musk’s ventures.
“Many will be looking for the board to provide assurances and convictions that there are guardrails in place to be sure there’s not too much mixing of businesses,” said Jessica McDougall, partner at Longacre Square.
