Tesla shareholders have approved a record-setting pay package for chief executive Elon Musk that could be worth almost $1 trillion, gaining the backing of roughly 75% of votes at the company’s annual meeting in Austin, Texas.
The plan — which would award Musk hundreds of millions of new shares if he meets ambitious targets over the next decade — drew loud applause from the crowd as the proposal passed. Musk, already the world’s richest person, greeted supporters onstage, danced and said the company was opening “a whole new book” for Tesla.
To unlock the largest portions of the award, Tesla must see dramatic growth. Among the milestones are lifting the company’s market value to about $8.5 trillion from roughly $1.4 trillion at the time of the vote, and putting a million fully autonomous Robotaxi vehicles into commercial service. The package is structured around a series of valuation and operational goals that must be met over 10 years.
Musk also emphasized the Optimus humanoid robot during his remarks, underscoring the company’s push into robotics even as some investors and analysts urged renewed focus on Tesla’s core electric vehicle business. Analyst Gene Munster noted the CEO’s emphasis on Optimus rather than cars and autonomous taxis, while longtime supporter Dan Ives said Musk remains “Tesla’s biggest asset” and argued that artificial intelligence prospects are driving new valuation expectations.
Not all investors celebrated. Critics have raised concerns about the size of the award and about corporate governance around the deal. Major institutional investors including Norway’s sovereign wealth fund and CalPERS opposed the package, leaving Musk more dependent on Tesla’s large retail investor base. The earlier, similarly structured award — which paid out after Musk helped boost Tesla’s market value — had been struck down by a Delaware judge who found the board too close to Musk; that ruling is under review by the Delaware Supreme Court. Tesla has since reincorporated in Texas.
Shareholder Ross Gerber said the agreement reflected “unbelievable” developments in business but warned the company faces many challenges, from weakening sales to brand damage tied to Musk’s polarizing public persona. Gerber’s firm recently reduced its Tesla holdings, citing concerns about how Musk’s behavior has affected the company’s reputation. He also questioned demand for humanoid robots and pointed to growing competition in autonomous taxi technology from rivals such as Waymo.
Regulatory scrutiny of Tesla’s self-driving features continues. U.S. regulators are investigating the company after incidents in which vehicles reportedly ran red lights or drove on the wrong side of the road, sometimes causing crashes. Musk told the meeting Tesla was close to being “almost comfortable” allowing drivers to text while the system is engaged — a statement likely to draw more attention from safety watchdogs.
Tesla shares ticked slightly higher in after-hours trading and have risen sharply over the past six months. Musk already owned about 13% of Tesla before the vote; if he achieves the targets, he stands to receive a very large equity grant. The board argued the package was necessary to retain Musk, saying the company could not afford to lose its chief executive.
Ahead of the meeting, members of Tesla’s board publicly promoted the proposal, a move that drew criticism from governance experts. Musk and his brother Kimbal — who sits on Tesla’s board — were allowed to vote at the meeting.
The vote closes a contentious chapter in Tesla’s long-running governance saga but opens another: delivering on extraordinarily lofty financial and technological promises in the coming decade while managing regulatory, competitive and reputational risks.
