Tesla shareholders approve Elon Musk's pathway to $1 trillion pay package

In a resounding vote of confidence, Tesla shareholders have approved an extraordinary compensation package for CEO Elon Musk that could see him earn up to $1 trillion worth of company stock if he successfully meets a series of ambitious performance targets over the next decade.

The vote, which passed with more than 75% shareholder support at the annual meeting on Thursday, charts a path for Musk to potentially become the world's first trillionaire and signals investors' deep trust in his vision to transform Tesla into an AI and robotics powerhouse.

The agreement

The compensation plan is structured as a series of stock grants contingent upon Musk achieving truly monumental milestones tied to Tesla's market value and operational output:

Market value Goal

The ultimate target requires Tesla's market capitalization to increase nearly sixfold from its current valuation to an astounding $8.5 trillion. The first milestone unlocks when the company hits a $2 trillion valuation.

Operational milestones

Musk must also deliver on several ambitious product and operational goals, including:

• Delivering 20 million Tesla vehicles within 10 years

• Deploying 1 million Robotaxis in commercial service

• Producing 1 million humanoid robots (Optimus).

The pay package is designed to secure Musk's commitment to Tesla for at least seven and a half years, ensuring he remains focused on these future technological goals.

Fierce opposition and controversy

The historic payout, the largest ever proposed for a corporate executive, faced fierce opposition from major institutional investors and corporate governance watchdogs who argued the plan was excessive and lacked proper safeguards.

Large funds, including Norway's sovereign wealth fund and proxy advisory firms like Glass Lewis and Institutional Shareholder Services, recommended voting against the package, citing the "total size of the award" and the lack of mitigation for "key person risk."

On his side, Musk had framed the vote not about the money, but about securing sufficient voting power to steer the company's future, particularly its highly anticipated "robot army."

Despite the dissent, the overwhelming support from retail investors and the Tesla board's warning that rejecting the plan could lead to Musk's exit ultimately carried the vote.

The approval grants the CEO enormous influence and reaffirms shareholders' belief that his leadership is essential for achieving the company's exponential growth targets.