Tesla shareholders gave a resounding green light Thursday to an unprecedented compensation plan for CEO Elon Musk, a package that could potentially value up to $1 trillion, marking one of the largest executive pay deals in corporate history.
The compensation plan, designed to keep Elon Musk at Tesla as the company advances its work in artificial intelligence and robotics, received backing from over 75 percent of shareholders, a Tesla official confirmed during the annual meeting.
Speaking to the assembled shareholders, a visibly elated Musk expressed his gratitude. “I’d like to just give a heartfelt thanks to everyone who supported the shareholder votes,” he said. “I super-appreciate it.”
At Tesla’s Austin factory, attendees erupted in cheers, chanting “Elon” after it was announced that more than 75 percent of participating shareholders had approved the compensation plan, reflecting the level of support Musk has historically received for his pay packages.
Reflecting on this hope and optimism, Musk shared,“what we’re about to embark upon is not merely a new chapter of the future of Tesla, but a whole new book.”
Musk will not receive the $1 trillion immediately, and he will not earn a traditional salary. Instead, the package is structured so he could earn hundreds of billions and gain additional control of Tesla by guiding the company to meet specific milestones and significantly increase its profits.
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The compensation plan is divided into 12 separate tranches, each tied to specific targets for Tesla’s operations, adjusted profits, and market value. Musk earns additional shares only when these goals are met. For example, Tesla, which currently has a market capitalization of around $1.5 trillion, would need to grow steadily to reach $8.5 trillion over the next ten years for Musk to unlock the full rewards of the package.
The plan is also designed to keep Musk at Tesla for a minimum of seven and a half years. If all milestones are achieved, his stake in the company could rise from roughly 12 percent when the package was announced in September to more than 25 percent.
Tesla shareholders have consistently backed Musk in past votes on his compensation, including a 2018 plan valued at roughly $55.8 billion, which faced repeated legal challenges in Delaware courts. After the latest Delaware ruling, Tesla’s board, led by Chairwoman Robyn Denholm, returned to the drawing board, first approving an interim award of about $29 billion in August and then rolling out the more expansive package in September.
On Thursday, shareholders once again approved a sky-high pay package for Musk while also backing other significant proposals, including the reelection of board members. However, the activist group Tesla Takedown criticized the outcome, pointing to the company’s recent declines in auto sales.
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While the shareholder approval came after two months of relentless campaigning by Tesla, its board, and top executives. The company launched repeated public appeals urging investors to back the package. Even typically media-averse Chairwoman Robyn Denholm conducted multiple interviews with major outlets, straining her voice before speaking at Thursday’s meeting. Tesla also took the unusual step of airing television ads to promote the vote, underscoring the intensity of its push for approval.
The group, which staged a protest against the plan Wednesday in downtown Austin, sharply criticized the vote. “Elon Musk just got one trillion dollars for failure,” they said. “Sales are down, safety risks are up and his politics are driving customers away. This isn’t leadership — it’s the world’s most expensive participation trophy.” On the other hand, Wedbush analyst Dan Ives noted that the overwhelming shareholder approval further solidifies Musk’s leadership role at Tesla.
Also, the compensation plan faced criticism from advisory firms Glass Lewis and Institutional Shareholder Services (ISS).
Earlier, Musk had urged shareholders to back the pay package, arguing that it would give him greater voting power within the company. He currently holds about 15% of Tesla but has repeatedly suggested he might step away if his control doesn’t increase to around 25%. Musk has said that level of influence would protect him from being sidelined and ensure he retains authority over Tesla’s ambitious work on autonomous technology, which he has described as the company’s developing “robot army.”
With a net worth exceeding $500 billion, Musk is already recognized as the world’s richest individual, according to Forbes’s real-time billionaire tracker. To claim the full compensation package, he must achieve 12 market capitalization milestones, with the first tranche unlocked once Tesla’s value rises from its current $1.5 trillion to $2 trillion.