Tesla shareholders have backed an extraordinary pay package for Elon Musk that could reach nearly $1 trillion. The plan, supported by 75% of voters at Thursday’s annual meeting, sparked loud applause and cheers from attendees.
Musk, the world’s richest individual, must significantly boost Tesla’s market value over the next decade to unlock the full amount. If he meets all performance goals, he will receive hundreds of millions of new Tesla shares.
Critics have called the payout excessive, but Tesla’s board insisted the company cannot risk losing Musk’s leadership.
Musk celebrates with dancing and bold words
After the vote, Musk took the stage in Austin, Texas, dancing as the audience chanted his name. “We’re not just starting a new chapter for Tesla; we’re beginning a whole new book,” he declared.
He added, “Other shareholder meetings are dull. Ours are electric. Just look at this energy!”
To earn the entire package, Musk must raise Tesla’s market capitalization from $1.4 trillion to $8.5 trillion and deploy one million self-driving Robotaxi vehicles worldwide.
Investors puzzled by Musk’s focus on robots
Instead of emphasizing Tesla’s electric vehicle business, Musk highlighted the company’s humanoid robot, Optimus. His focus surprised analysts who expected updates on cars and self-driving technology.
“Let it sink in where Musk’s attention lies,” wrote Gene Munster, managing partner at Deepwater Asset Management, on X. “His vision starts with Optimus. Still no mention of cars, FSD, or robotaxis.”
Later, Musk did discuss Tesla’s full self-driving software, saying the company was “almost comfortable” letting drivers “text and drive essentially.”
Safety concerns shadow self-driving ambitions
US regulators continue to investigate Tesla’s self-driving feature after several accidents in which cars ignored traffic signals or drove on the wrong side of the road. Some of these incidents caused injuries and crashes.
Despite the investigations, Tesla shares gained slightly in after-hours trading and have climbed more than 60% in the past six months.
Politics and perception weigh on Tesla’s brand
Tesla’s sales have declined over the past year, partly due to Musk’s public alignment with former US President Donald Trump. Their falling-out earlier this year brought even more attention to Musk’s political stance.
Investor Ross Gerber, CEO of Gerber Kawasaki, described Musk’s compensation as “another unbelievable chapter in corporate history.” He said Tesla still faces major challenges despite Musk’s ambitious goals.
Gerber questioned the demand for humanoid robots and noted Tesla’s growing competition from robotaxi developers such as Waymo.
He added that his firm reduced its Tesla holdings, saying, “Musk’s polarising persona has damaged the brand. Elon seems unaware of how low his public approval has become.”
Analysts still back Musk’s leadership
Dan Ives, a technology analyst at Wedbush Securities, called Musk “Tesla’s most valuable asset.” In a note after the vote, he said, “Tesla’s AI-driven valuation is beginning to unfold. The next growth stage has started.”
Musk already owns about 13% of Tesla. Shareholders had previously approved a multibillion-dollar pay plan tied to a tenfold increase in the company’s value—a milestone Musk achieved.
Legal hurdles and a move to Texas
A Delaware judge had earlier struck down that pay plan, ruling Tesla’s board was too close to Musk. Tesla then shifted its legal base from Delaware to Texas. The Delaware Supreme Court is now reviewing the lower court’s decision.
The new pay 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.
Because of their rejection, Musk relied on Tesla’s unusually large number of small investors to get the deal approved.
Tesla’s board leads an aggressive campaign
Musk and his brother Kimbal, a Tesla board member, were both eligible to vote at Thursday’s meeting. In the lead-up to the event, board members launched a vigorous campaign urging shareholders to support the deal.
A promotional video on votetesla.com featured board chair Robyn Denholm and director Kathleen Wilson-Thompson praising Musk’s leadership and vision for Tesla’s future. The campaign drew criticism from governance experts who said it blurred ethical lines between marketing and shareholder influence.
