Tesla Shareholders Re-Approve Elon Musk's $1 Trillion Potential Pay Package

Austin, Texas – Tesla shareholders have overwhelmingly approved a new compensation package for CEO Elon Musk, potentially valued at up to $1 trillion over the next decade, contingent on the electric vehicle maker achieving ambitious performance milestones. The decision, announced at the company's annual meeting, saw more than 75% of voting shares in favor of the plan, marking a significant victory for Musk and the Tesla board. This re-approval follows a previous 2018 pay package, initially valued at $56 billion, being invalidated by a Delaware court in January 2024.

The newly approved package consists of 12 tranches of stock options that Musk will receive if Tesla hits a series of market capitalization, operational, and financial targets. These include growing Tesla's market value to an extraordinary $8.5 trillion, delivering 20 million vehicles, deploying 1 million robotaxis, selling 1 million Optimus humanoid robots, and achieving $400 billion in annual adjusted profit. If all conditions are met, Musk's ownership stake in the company could increase from approximately 13% to as much as 29%.

Tesla's board strongly advocated for the package, arguing it was crucial to retain Musk's focus and leadership, with some warnings that he might otherwise divert his attention from the company. The re-vote was prompted by the Delaware court's ruling, which found the original 2018 package was improperly granted. Tesla subsequently moved its legal domicile from Delaware to Texas, paving the way for this new shareholder vote.

Despite the strong shareholder support, the compensation plan faced opposition from some institutional investors and proxy advisory firms like Glass Lewis and ISS, who cited concerns over its unprecedented size, potential shareholder dilution, and key person risk. Norway's sovereign wealth fund, a major Tesla investor, notably voted against the proposal. Following the announcement, Musk expressed his gratitude, stating, "What we're about to embark upon is not merely a new chapter of the future of Tesla, but a whole new book."