Tesla shareholders have voted to approve a historic compensation package for Elon Musk that could reach nearly $1 trillion. The plan, backed by 75% of votes at Thursday’s annual meeting, drew loud applause and cheers from attendees.
Musk, already the world’s richest individual, must dramatically increase Tesla’s market value over the next decade to claim the full payout. If he achieves all performance goals, he will receive hundreds of millions of new Tesla shares.
Critics have called the plan excessive, but Tesla’s board argued that the company cannot afford to lose Musk’s leadership.
Musk celebrates his victory in Austin
After the vote, Musk appeared on stage in Austin, Texas, dancing as the crowd chanted his name. “We’re not just opening a new chapter for Tesla; we’re writing an entirely new book,” he said.
He added, “Other shareholder meetings are dull. Ours are electrifying. Look at this energy!”
To unlock the full payout, Musk must raise Tesla’s market capitalization from $1.4 trillion to $8.5 trillion and put one million self-driving Robotaxi vehicles into commercial operation.
Focus shifts to the Optimus robot
Musk turned attention from Tesla’s electric vehicles to the company’s humanoid robot, Optimus, surprising analysts expecting updates on Tesla’s car business.
“Let it sink in where Musk’s focus is,” wrote Gene Munster, managing partner at Deepwater Asset Management, on X. “His 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 continue self-driving investigation
US authorities are investigating Tesla’s self-driving system after reports of vehicles running red lights or driving on the wrong side of the road. Some incidents caused crashes and injuries.
Despite regulatory scrutiny, Tesla’s shares rose slightly in after-hours trading and have climbed more than 60% in the past six months.
Politics and public perception challenge Tesla
Tesla’s sales have slipped over the past year following Musk’s public support for former US President Donald Trump. Their later falling-out added more scrutiny for Musk’s public image.
Investor Ross Gerber, CEO of Gerber Kawasaki, called Musk’s compensation “another unbelievable chapter in corporate history.” He said Tesla faces serious financial and brand challenges despite Musk’s ambitious plans.
Gerber questioned demand for humanoid robots and highlighted competition from robotaxi rivals such as Waymo.
He added that his firm reduced Tesla holdings because “Musk’s polarising persona has damaged the brand. Elon seems unaware of how unpopular he has become.”
Analysts continue to back Musk
Dan Ives, senior analyst at Wedbush Securities, described Musk as “Tesla’s most valuable asset.” In a note after the vote, he said, “Tesla’s AI-driven value is now being unlocked. The next phase of growth has begun.”
Musk already owns around 13% of Tesla shares. Shareholders had previously approved a multibillion-dollar pay package tied to a tenfold increase in Tesla’s market value—a milestone Musk achieved.
Legal disputes and corporate relocation
A Delaware judge struck down the earlier pay plan, ruling Tesla’s board was too closely tied to Musk. Tesla later reincorporated in Texas. The Delaware Supreme Court is now reviewing the lower court’s decision.
The new 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.
With large investors opposing the plan, Musk relied heavily on Tesla’s large retail shareholder base to secure approval.
Tesla board promotes Musk’s plan
Musk and his brother Kimbal, a board member, were both eligible to vote at Thursday’s meeting. In the weeks before the vote, Tesla’s directors ran an extensive campaign encouraging shareholder approval.
A video on votetesla.com featured board chair Robyn Denholm and director Kathleen Wilson-Thompson praising Musk’s leadership and vision for Tesla’s future. Experts criticized the campaign for blurring lines between shareholder communication and promotional marketing.
