Tesla shareholders have given Elon Musk the green light for a pay package that could reach an astonishing $1 trillion. The plan, backed by 75% of votes at Thursday’s annual meeting, drew thunderous applause from the crowd.
Musk, already the richest man in the world, must dramatically boost Tesla’s market value over the next decade to claim the full payout. If he meets all performance goals, he will receive hundreds of millions of new Tesla shares.
The immense deal has attracted criticism, but Tesla’s board defended it, arguing that losing Musk would damage the company’s future.
Musk celebrates on stage in Austin
After the results were announced, Musk appeared on stage in Austin, Texas, dancing as supporters chanted his name. “We’re not just opening a new chapter for Tesla; we’re writing an entirely new book,” he told the cheering audience.
He added, “Other shareholder meetings are dull. Ours are unbelievable. Look at this crowd!”
To receive his full payout, Musk must lift Tesla’s market capitalization from $1.4 trillion to $8.5 trillion and put one million fully self-driving Robotaxi vehicles into commercial operation.
Optimus robot becomes Musk’s new focus
At the meeting, Musk emphasized Tesla’s humanoid robot, Optimus, instead of its electric cars, surprising many investors and analysts.
“Let it sink in where Musk’s priorities lie,” 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 mentioned Tesla’s full self-driving software, saying the company was “almost comfortable” allowing drivers to “text and drive essentially.”
Regulators investigate Tesla’s self-driving system
US regulators continue to investigate Tesla’s self-driving feature after several incidents where vehicles ran red lights or drove on the wrong side of the road. Some accidents resulted in injuries and crashes.
Despite the scrutiny, Tesla’s share price rose slightly in after-hours trading and has increased by more than 60% in the last six months.
Political ties and image problems
Tesla’s sales have declined over the past year after Musk’s public association with former US President Donald Trump. Their relationship collapsed earlier this year, creating further controversy for the company.
Investor Ross Gerber, chief executive of Gerber Kawasaki, called Musk’s deal “another unbelievable moment in corporate history.” He said Tesla faces serious financial and reputational challenges despite Musk’s success.
Gerber questioned the potential demand for humanoid robots and pointed to increasing competition from robotaxi rivals such as Waymo.
He added that his firm reduced its Tesla holdings because “Musk’s polarising persona” has “damaged the brand’s image.” “Elon seems unaware of how unpopular he has become,” Gerber said.
Supporters defend Musk’s leadership
Dan Ives, a senior analyst at Wedbush Securities, described Musk as “Tesla’s greatest asset.” In a note following the vote, he wrote, “Tesla’s AI-driven value is beginning to unfold. The next growth chapter has started.”
Musk already holds about 13% of Tesla’s shares. Shareholders had previously approved a multibillion-dollar compensation plan linked to a tenfold increase in Tesla’s value—a goal Musk had already achieved.
Legal disputes and Tesla’s relocation to Texas
A Delaware judge struck down that earlier pay deal, ruling that Tesla’s board was too closely connected to Musk. In response, Tesla moved its legal headquarters from Delaware to Texas. The Delaware Supreme Court is now reviewing the lower court’s decision.
The new compensation package faced opposition from major institutional investors such as Norway’s sovereign wealth fund and the California Public Employees’ Retirement System, the largest US public pension fund.
Because of that opposition, Musk relied heavily on Tesla’s large group of retail investors to get the plan approved.
Tesla board rallies behind 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 board members launched a strong campaign to build support for the deal.
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 campaign drew criticism from governance experts who said it blurred the line between corporate communication and shareholder lobbying.
