Musk secures historic $1 trn Tesla pay package with shareholder approval

The plan won over 75 per cent support at Tesla's annual meeting in Austin, Texas, as investors endorsed Musk's vision of turning Tesla into an AI and robotics powerhouse

Tesla CEO Elon Musk has secured shareholder approval for what is being called the largest corporate pay package in history, potentially worth up to $1 trillion in stock over the next decade, reported Reuters. After taxes and required payments, the net value stands at about $878 billion.

What conditions must Elon Musk meet to receive the full payout?

 

Musk’s pay is tied to ambitious milestones: delivering 20 million vehicles, operating 1 million robotaxis, selling 1 million robots, and earning up to $400 billion in core profit. Additionally, Tesla’s market capitalisation must rise from $1.5 trillion to $8.5 trillion for Musk to earn the full package. Each milestone represents 1 per cent of stock, meaning even partial success could result in tens of billions in compensation.

Why did shareholders back Musk’s pay package amid controversy?

 

The proposal was approved by over 75 per cent of shareholders at Tesla’s annual meeting in Austin, Texas. Investors largely backed Musk’s vision of transforming Tesla into an AI and robotics leader, with initiatives such as robotaxi networks and humanoid robots.

 

The vote also ratified Tesla’s investment in Musk’s AI startup, xAI, seen as a key partner for the company’s autonomous vehicle ambitions.

 

Tesla’s board had warned that rejecting the plan could risk Musk’s exit, reinforcing the proposal’s importance in retaining his leadership. Musk said the package would increase his voting stake, which he values more than the financial payout itself.

Which investors opposed Elon Musk’s pay, and why?

 

Some major investors, including Norway’s sovereign wealth fund and proxy firms Glass Lewis and Institutional Shareholder Services, opposed the plan, citing concerns that the massive pay could dilute shareholder value and and concentrate too much power in Musk’s hands.  Tesla’s board argued that the package would ultimately benefit shareholders by tying Musk’s compensation to operational and stock performance milestones.

What made the Tesla annual meeting unique this year?

 

Musk made a theatrical entrance with dancing robots, telling shareholders: “Other shareholder meetings are like snoozefests, but ours are bangers", reported Reuters. Shareholders reelected three board members and approved annual board elections and a replacement pay plan. Musk stated that Tesla’s next chapter would not just be a new chapter but “a whole new book.”

What are the long-term implications for Tesla and AI?

 

The approval of Musk’s pay package signals investor confidence in Tesla’s evolution from an electric vehicle manufacturer to a technology-driven AI enterprise.

 

The company’s deepening integration with xAI is expected to accelerate development of autonomous driving systems, robotaxis, and humanoid robots, potentially positioning Tesla at the forefront of the next industrial revolution in mobility and automation.