Tesla shareholders have approved an unprecedented compensation plan for Elon Musk that could reach nearly $1 trillion. The decision, supported by 75% of votes during Thursday’s annual meeting, drew loud applause from the audience.
Musk, already the world’s richest man, must dramatically grow Tesla’s market value over the next ten years to unlock the full payout. If he achieves all targets, he will receive hundreds of millions of new Tesla shares.
The extraordinary scale of the package has sparked criticism, but Tesla’s board argued that Musk might walk away without it. They said the company cannot afford to lose its driving force.
Musk celebrates in style at Tesla’s Austin meeting
Following the announcement, Musk appeared on stage in Austin, Texas, dancing to chants of his name. “We’re not just beginning a new chapter for Tesla; we’re writing an entirely new book,” he told shareholders.
He laughed as he added, “Other shareholder meetings are dull. Ours are insane. Look at this energy.”
To receive the full payout, Musk must lift Tesla’s market capitalization from $1.4 trillion to $8.5 trillion and launch one million fully self-driving Robotaxi vehicles into service.
Attention turns to the Optimus robot
Musk opened the meeting by highlighting the company’s humanoid robot, Optimus, instead of focusing on electric vehicles. The move disappointed many analysts who wanted updates on Tesla’s core business.
“Let it sink in where Musk’s priorities are,” wrote Gene Munster, managing partner at Deepwater Asset Management, on X. “His new vision starts with Optimus. Still no mention of cars, self-driving, or robotaxis.”
Later, Musk touched on Tesla’s full self-driving technology, saying the company was “almost comfortable” allowing drivers to “text and drive essentially.”
Regulators continue to probe self-driving incidents
US safety officials are still investigating Tesla’s self-driving system after several reports of vehicles running red lights or driving on the wrong side of the road. Some of these incidents caused crashes and injuries.
Despite the ongoing scrutiny, Tesla’s stock rose slightly in after-hours trading and has jumped more than 60% in the past six months.
Political ties and investor doubts
Tesla’s sales have declined in the past year, following Musk’s public support for former US President Donald Trump. Their alliance ended earlier this year, but the controversy hurt Tesla’s image.
Investor Ross Gerber, chief executive of Gerber Kawasaki, described the new deal as “another unbelievable moment in business history.” He said Tesla still faces major challenges despite Musk’s ambitions.
Gerber questioned the market demand for humanoid robots and noted the growing competition in robotaxi services from rivals like Waymo.
He added that his firm recently cut its Tesla holdings due to “Musk’s polarising personality,” which he said has “hurt the brand’s reputation.” “Elon seems unaware of how unpopular he has become with the public,” Gerber said.
Supporters hail Musk as Tesla’s biggest strength
Dan Ives, a long-time Tesla analyst at Wedbush Securities, called Musk “Tesla’s most valuable asset.” In a report after the vote, he said, “Tesla’s AI potential is starting to take shape. The company’s next growth phase has begun.”
Musk already owns around 13% of Tesla shares. Shareholders had previously approved a massive pay plan tied to a tenfold increase in market value—a goal Musk had already achieved.
Legal fights and Tesla’s move to Texas
A Delaware judge struck down that earlier deal, saying Tesla’s board was too closely tied to Musk. Tesla then shifted its legal headquarters from Delaware to Texas. The Delaware Supreme Court is now reviewing the case.
The new pay package 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 resistance, Musk relied heavily on Tesla’s unusually large base of retail investors to secure approval.
Tesla board mounts campaign to back Musk
Musk and his brother Kimbal, who sits on Tesla’s board, were both allowed to vote at Thursday’s meeting. In the weeks before the event, Tesla’s directors launched an extensive campaign to persuade shareholders to back the plan.
A video posted on votetesla.com featured board chair Robyn Denholm and director Kathleen Wilson-Thompson praising Musk’s leadership and long-term vision. The promotional effort drew criticism from governance experts who said it blurred the line between marketing and corporate accountability.
