Tesla investors have approved a record-breaking pay package for Elon Musk that could total nearly $1 trillion. The deal, backed by 75% of votes at Thursday’s annual meeting, drew loud applause and excitement from attendees.
Musk, already the world’s richest individual, must substantially increase Tesla’s market value over the next ten years to unlock the full payout. If he meets all performance goals, he will receive hundreds of millions of new Tesla shares.
Critics have called the plan excessive, but Tesla’s board insisted the company cannot risk losing Musk’s leadership.
Musk celebrates victory in Austin
After the vote, Musk appeared on stage in Austin, Texas, dancing as the audience chanted his name. “We’re not just opening a new chapter for Tesla; we’re writing a whole new book,” he said.
He added, “Other shareholder meetings are dull. Ours are electrifying. Look at this energy!”
To claim the full payout, Musk must raise 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 the focus
Musk shifted attention from Tesla’s electric vehicles to the humanoid robot, Optimus, surprising analysts who expected updates on the 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 addressed Tesla’s full self-driving software, saying the company was “almost comfortable” allowing drivers to “text and drive essentially.”
Self-driving technology under scrutiny
US regulators 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 the scrutiny, Tesla shares rose slightly in after-hours trading and have climbed more than 60% over the past six months.
Political ties and public perception create challenges
Tesla’s sales have declined over the past year following Musk’s public support for former US President Donald Trump. Their later falling-out added further scrutiny to Musk’s public image.
Investor Ross Gerber, CEO of Gerber Kawasaki, called Musk’s pay plan “another unbelievable chapter in corporate history.” He said Tesla faces financial and brand challenges despite Musk’s ambitious goals.
Gerber questioned demand for humanoid robots and highlighted competition from robotaxi rivals like Waymo.
He added that his firm reduced Tesla holdings, saying, “Musk’s polarising persona has damaged the brand. Elon seems unaware of how unpopular he has become.”
Analysts continue to support 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 growth phase has begun.”
Musk already owns about 13% of Tesla shares. Shareholders had previously approved another multibillion-dollar pay plan tied to a tenfold increase in company value—a milestone Musk achieved.
Legal hurdles and relocation to Texas
A Delaware judge struck down the previous pay plan, ruling Tesla’s board was too closely tied to Musk. Tesla later reincorporated in Texas. The Delaware Supreme Court is reviewing the lower court’s decision.
The new plan 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 opposed, Musk relied heavily on Tesla’s retail shareholder base to secure approval.
Tesla board campaigns for approval
Musk and his brother Kimbal, a board member, were both eligible to vote at Thursday’s meeting. In the weeks leading up to the vote, Tesla directors ran a campaign encouraging shareholders to back the package.
A video on votetesla.com featured board chair Robyn Denholm and director Kathleen Wilson-Thompson praising Musk’s leadership and long-term vision. Experts criticized the campaign for blurring the line between shareholder communication and promotional marketing.
