By Keerthi Ramesh
Elon Musk’s newly approved compensation plan, which could deliver as much as $1 trillion in stock over the next decade, is reviving intense scrutiny of executive pay practices at major corporations, highlighting the growing gap between CEO rewards and average worker wages.
Tesla Inc.’s board this week said shareholders overwhelmingly backed the historic pay package at the company’s annual meeting, with more than 75 % of votes cast in favor of the plan. The compensation structure, unlike typical salaries and cash bonuses, is tied entirely to ambitious performance and market-value milestones that Musk must meet for awards to vest.
Under the arrangement, Musk, who already ranks among the world’s richest individuals could gain up to 423.7 million additional Tesla shares over the next decade. Those shares would only become his if Tesla hits a series of aggressive targets that include boosting the company’s market capitalization to roughly $8.5 trillion and achieving a host of operational goals tied to vehicle deliveries, autonomous robotics and software subscriptions.
Supporters of the plan argue it aligns Musk’s incentives with long-term shareholder value and helps ensure his continued leadership as Tesla seeks to expand beyond electric cars into autonomous technologies and robotics. At the shareholder meeting, Musk thanked supporters and expressed enthusiasm for the company’s strategic direction.
READ: Elon Musk says he ‘broke the IRS computer’ paying billions in taxes (January 1, 2026)
But the scale of the award has sparked pushback from critics who say it exemplifies the widening gulf between executive compensation and returns for workers. Some institutional investors and state officials had urged shareholders to reject the package, arguing that it concentrates too much power in one individual and raises questions about board independence and governance.
“The board’s structure and its close ties to the CEO have repeatedly failed to provide rigorous oversight,” read a letter from a coalition of investors and public officials. They faulted Tesla’s leadership for permitting Musk to divide his attention among multiple ventures and political activities while being rewarded with potentially unprecedented wealth.
The controversy around Musk’s pay comes amid broader discussions in business and policymaking circles about CEO compensation trends. Over recent decades, executive pay at major U.S. companies has soared often outpacing wage growth for average workers, stoking debate about income inequality and corporate governance practices.
READ: Tesla shareholders approve Elon Musk’s record-breaking $1 trillion pay deal (November 7, 2025)
Corporate compensation experts say performance-based equity awards have become more common, but few have reached the stratospheric levels now possible under Tesla’s plan. Even if all conditions are met, the payout will be contingent on results rarely seen in corporate history. Musk must deliver sustained market growth and major technological breakthroughs for the full award to materialize.
Investors and labor advocates will likely continue to monitor how the package influences Tesla’s strategic decisions and whether it sets a precedent for executive compensation in the technology and automotive sectors.