Tesla shareholders have approved an extraordinary pay package for Elon Musk that could reach almost $1 trillion. The decision, backed by 75% of votes at Thursday’s annual meeting, was met with cheers and celebration.
Musk, already the world’s richest man, must dramatically increase Tesla’s market value over the next ten years to receive the full payout. If he achieves the targets, he will gain hundreds of millions of new Tesla shares.
The enormous scale of the deal sparked criticism, but Tesla’s board defended the move, saying the company cannot afford to lose Musk’s leadership.
Musk celebrates victory in Austin
After the announcement, Musk took to the stage in Austin, Texas, dancing to chants of his name. “We’re not just starting a new chapter for Tesla, we’re writing a whole new book,” he said to an excited crowd.
He joked, “Other shareholder meetings are boring. Ours are incredible. Look at this energy.”
To claim the full value of his reward, Musk must lift Tesla’s market worth from $1.4 trillion to $8.5 trillion and introduce one million self-driving Robotaxi vehicles into service.
Optimus robot takes the spotlight
At the meeting, Musk focused on Tesla’s humanoid robot, Optimus, instead of its electric vehicles, surprising many analysts.
“Let it sink in where Musk’s attention is,” wrote Gene Munster, managing partner at Deepwater Asset Management, on X. “His new vision begins with Optimus. Still no mention of cars, self-driving, or robotaxis.”
Later, Musk mentioned Tesla’s full self-driving technology, saying the company was “almost comfortable” allowing drivers to “text and drive essentially.”
Safety concerns over self-driving system
US regulators continue investigating Tesla’s self-driving software after several incidents where cars ran red lights or drove on the wrong side of the road. Some accidents led to crashes and injuries.
Despite these concerns, Tesla’s shares rose slightly in after-hours trading and have climbed over 60% in the past six months.
Political links and growing criticism
Tesla’s sales have declined in the past year as Musk’s public alignment with former US President Donald Trump drew backlash. Their relationship ended earlier this year, adding pressure to the company’s image.
Investor Ross Gerber, chief executive of Gerber Kawasaki, called Musk’s pay package “another unbelievable moment in business.” He said Tesla faces significant challenges despite Musk’s bold ambitions.
Gerber questioned the market’s interest in humanoid robots and highlighted rising competition from robotaxi rivals like Waymo. He also said his firm cut its Tesla investment because “Musk’s polarising personality” has “damaged the brand.”
“Elon seems disconnected from how unpopular he has become among the public,” Gerber added.
Analysts still back Musk’s leadership
Dan Ives, a technology analyst at Wedbush Securities, called Musk “Tesla’s greatest asset.” In a note after the vote, he wrote, “Tesla’s AI value is starting to unfold. The next AI-driven growth phase has begun.”
Musk already holds about 13% of Tesla’s shares. Shareholders had previously approved a large pay package tied to a tenfold rise in Tesla’s market value, a target Musk already reached.
Legal setbacks and relocation to Texas
A Delaware judge later overturned that earlier pay plan, ruling that Tesla’s board was too closely tied to Musk. Tesla then moved its legal base from Delaware to Texas. The Delaware Supreme Court is now reviewing the lower court’s decision.
The new pay deal faced strong opposition from major institutional investors, including Norway’s sovereign wealth fund and the California Public Employees’ Retirement System, the largest public pension fund in the US.
Because of their resistance, Musk relied heavily on Tesla’s large community of retail investors to pass the vote.
Tesla board launches campaign for Musk
Both Elon Musk and his brother Kimbal, who sits on Tesla’s board, were allowed to vote at the meeting. In the weeks before the event, Tesla’s directors launched a high-profile campaign urging shareholders to support the deal.
A promotional video on votetesla.com featured board chair Robyn Denholm and director Kathleen Wilson-Thompson praising Musk’s leadership and long-term vision. The effort drew criticism from governance experts who said it blurred the line between shareholder engagement and corporate marketing.
