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.

The decision, to be announced after the company’s annual general meeting in Austin, Texas, will boost Musk’s personal wealth to trillions of dollars and will also reveal how much trust investors have in his leadership and vision to transform Tesla from an electric vehicle maker into a company built around robotics and autonomous systems. 

A “yes” would reaffirm that faith and a “no” could unsettle markets.

The proposed package links Musk’s payout to several targets, which include Tesla delivering 20 million vehicles within a decade, putting one million robotaxis on the road, and raising its market capitalisation from around $1.5 trillion to as much as $8.5 trillion. 

Supporters call these goals huge but achievable under Musk’s leadership. On the other hand, some see them as an excessive risk that gives too much power to one man.

Among the most vocal opponents are Norway’s sovereign wealth fund and leading proxy advisory firms, who argue the package is “excessive” and “unwarranted.” Still, Elon Musk holds about 15% of Tesla’s shares and is allowed to vote them this time, making the pay package approval highly likely.

The vote also follows a case in Delaware, where Musk’s previous $50 billion package was voided earlier this year. Tesla’s relocation to Texas now allows shareholders to revisit that compensation under different corporate laws.

Tesla’s Chair, Robyn Denholm, in a letter to shareholders, urged support for the plan: “The fundamental question for shareholders at this year’s Annual Meeting is simple: Do you want to retain Elon as Tesla’s CEO and motivate him to drive Tesla to become the leading provider of autonomous solutions and the most valuable company in the world?”

Investors will also vote on whether Tesla should invest in xAI, Musk’s artificial intelligence company. He has previously said Tesla “should back the company,” but the board has not endorsed the move. Some see it as a way to speed up Tesla’s AI vision; others fear conflicts of interest, given Musk’s multiple ventures.

Another proposal seeks to abolish Tesla’s supermajority voting requirement, which currently demands a two-thirds majority to make key changes. Previous attempts to scrap it failed in 2019, 2021, and 2022. If passed, it would lower the threshold to a simple majority, and some investors believe it could consolidate Musk’s influence further.

A separate proposal calls for Tesla to adopt a political neutrality policy, prohibiting partisan activity by executives and assigning oversight to a board committee. Tesla’s board opposes the measure, saying its current governance already ensures transparency and accountability.

This measure indirectly tests investor mindset toward Musk’s outspoken political behaviour, including his public support for former U.S. President Donald Trump.

Despite the near certainty of passage, the vote has divided institutional investors. Norway’s sovereign wealth fund, several U.S. pension funds, and major proxy advisers such as ISS and Glass Lewis have all declared opposition. 

Musk’s base of retail shareholders, however, remains fiercely loyal and could provide the margin of victory, as they did in last year’s shareholder vote.

Musk’s personal ventures, public remarks, and unpredictable management style have repeatedly influenced Tesla’s stock and reputation. 

It’s been argued that Tesla’s board has become too aligned with him. Stephen Diamond, a corporate governance expert at Santa Clara University, observed: “There’s very little evidence of any dissent or daylight between the board and Musk on any issue. You just have to wonder whether that’s really a rational way to run the company.”

If the new pay package passes by a wide margin, it would strengthen Musk’s grip on Tesla and symbolically counter the Delaware court’s earlier ruling. But a narrow approval could lead to investor unease over Musk’s position and Tesla’s future governance.

Musk himself has tied his continued leadership to shareholder approval. Tesla’s board previously revealed that he might walk away if denied the package.