Tesla shareholders have approved an unprecedented compensation deal for Elon Musk that could reach nearly $1 trillion. The plan, supported by 75% of votes at Thursday’s annual meeting, was met with loud applause and cheers.
Musk, already the world’s richest individual, must significantly increase Tesla’s market value over the next decade to unlock the full payout. If he meets all performance targets, he will receive hundreds of millions of new Tesla shares.
Critics have called the package excessive, but Tesla’s board insisted the company cannot afford to lose Musk’s leadership.
Musk celebrates in Austin
Following the vote, Musk took the stage in Austin, Texas, dancing as the audience chanted his name. “We’re not just opening a new chapter for Tesla; we’re writing an entirely new book,” he said.
He added, “Other shareholder meetings are dull. Ours are electrifying. Look at this energy!”
To claim the full payout, Musk must raise Tesla’s market capitalization from $1.4 trillion to $8.5 trillion and launch one million fully self-driving Robotaxi vehicles into commercial operation.
Optimus robot becomes focal point
Musk shifted attention from Tesla’s electric vehicles to the humanoid robot, Optimus, surprising analysts who expected updates on the car business.
“Let it sink in where Musk’s focus is,” wrote Gene Munster, managing partner at Deepwater Asset Management, on X. “His vision starts with Optimus. Still no mention of cars, self-driving, or robotaxis.”
Later, Musk briefly discussed Tesla’s full self-driving software, saying the company was “almost comfortable” allowing drivers to “text and drive essentially.”
Self-driving technology under regulatory review
US regulators continue to investigate Tesla’s self-driving system after reports of cars running red lights or driving on the wrong side of the road. Some incidents caused crashes and injuries.
Despite scrutiny, Tesla shares rose slightly in after-hours trading and have increased more than 60% over the past six months.
Politics and public perception weigh on Tesla
Tesla’s sales have declined over the past year following Musk’s public support for former US President Donald Trump. Their later falling-out added further scrutiny to Musk’s image.
Investor Ross Gerber, CEO of Gerber Kawasaki, called Musk’s compensation plan “another unbelievable chapter in corporate history.” He said Tesla faces financial and brand challenges despite Musk’s ambitious goals.
Gerber questioned the market demand for humanoid robots and highlighted competition from robotaxi rivals like Waymo.
He added that his firm reduced Tesla holdings, saying, “Musk’s polarising persona has damaged the brand. Elon seems unaware of how unpopular he has become.”
Analysts continue to support Musk
Dan Ives, senior analyst at Wedbush Securities, described Musk as “Tesla’s most valuable asset.” In a note after the vote, he said, “Tesla’s AI-driven value is now being unlocked. The next growth phase has begun.”
Musk already owns about 13% of Tesla shares. Shareholders had previously approved another multibillion-dollar pay plan tied to a tenfold increase in company value, which Musk achieved.
Legal challenges and corporate move to Texas
A Delaware judge struck down the earlier pay plan, ruling Tesla’s board was too closely connected to Musk. Tesla later reincorporated in Texas. The Delaware Supreme Court is reviewing the lower court’s decision.
The new deal faced opposition from major institutional investors, including Norway’s sovereign wealth fund and the California Public Employees’ Retirement System, the largest US public pension fund.
With major investors opposed, Musk relied heavily on Tesla’s large retail shareholder base to secure approval.
Tesla board campaigns for shareholder support
Musk and his brother Kimbal, a board member, were both eligible to vote at Thursday’s meeting. In the weeks before the vote, Tesla directors ran an extensive campaign urging shareholders to approve the package.
A video on votetesla.com featured board chair Robyn Denholm and director Kathleen Wilson-Thompson praising Musk’s leadership and long-term vision. Experts criticized the campaign for blurring the line between shareholder communication and marketing.
