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Tesla shareholders approved an epic $1 trillion pay package for Elon Musk on Thursday – after the mercurial boss threatened to leave the company if he didn’t get it.
The eye-popping compensation is the largest on record and could make Musk the world’s first trillionaire — although he’ll first have to hit a series of performance targets that stretch across the next decade. The 54-year-old is already the world’s richest person with a fortune of $490.1 billion, according to Forbes.
Stock will be awarded to Musk in a set of 12 tranches. He would receive his first round of stock if Tesla hits a $2 trillion valuation and delivers 20 million vehicles. He gets another tranche if Tesla reaches a market capitalization of $3 trillion and delivers 1 million of its “Optimus” humanoid robots.
If Tesla scales all of the hurdles, its market value would explode to $8.5 trillion, with Musk owning about a quarter of the company’s shares.
Even if Tesla only achieves the first two benchmarks, Musk himself will have earned $26 billion – more than the total lifetime pay of the Meta’s Mark Zuckerberg, Apple’s Tim Cook and Nvidia’s Jensen Huang combined, according to a recent Reuters analysis.
More than 75% of shareholders voted in favor of the proposal, according to a preliminary tally announced at Tesla’s annual meeting. The vote signaled a major show of confidence for Musk despite a recent rough patch for Tesla’s stock, which has been weighed down by a sales slump.
It was also a major relief for Tesla’s board of directors, which had warned that Musk could ditch the company altogether if the vote failed.
The payout package prevailed despite critics that included Pope Leo XIV, who said it flies in the face of “the value of human life, of the family, of the value of society.” Norway’s giant oil fund, a major Tesla investor, also voted against it.
Key proxy advisory firms ISS and Glass Lewis told shareholders to nix the deal, arguing it was excessive. Musk pushed back, declaring in an Oct. 29 X post that “control of Tesla could affect the future of civilization.”
Ron Baron, a major Tesla shareholder, said he was in favor of the deal.
“Elon is the ultimate ‘key man’ of key man risk,” Baron wrote on X. “Without his relentless drive and uncompromising standards, there would be no Tesla.”
Notably, the compensation plan does not require Musk to limit his involvement in politics – a key concern for some shareholders who linked his work with President Trump’s Department of Government Efficiency to Tesla’s sales woes earlier this year.
Tesla’s board argued that Musk’s leadership is essential in order for the company to navigate its complex plans to roll out millions of “Optimus” humanoid robots and self-driving taxis in the coming years.
“If we build this robot army, do I have at least a strong influence over that robot army?” Musk said during the company’s third-quarter earnings call. “I don’t feel comfortable building that robot army if I don’t have at least a strong influence.”
Tesla’s board crafted the historic pay plan after a Delaware judge struck down a $56 billion compensation plan for Musk. The judge ruled that the previous package, which was approved in 2018, was excessive and riddled with conflicts of interest.
Musk was so incensed by the decision, which remains tied up in court, that he moved Tesla’s state of incorporation to Texas from Delaware.
Ahead of the vote, the Kalshi prediction market projected a 92% chance that shareholders would support the pay package.
The Tesla board urged shareholders to back the proposal in a message posted ahead of the meeting on the company’s website, which read: “the future of Tesla is in your hands.”
“We are at a pivotal juncture in Tesla’s history, and the proposals the Special Committee has carefully designed and the Board has put forward will help determine Tesla’s future,” the message stated. “If you believe, like us, that Elon is the CEO that can make our ambitious vision a reality, vote NOW.”
Tesla shares are up nearly 20% since the start of the year despite a series of dismal earnings results as the company navigates concerns related to its aging car lineup and increased competition from the likes of BYD and other Chinese electric car firms.
In July, Musk admitted that he saw “a few rough quarters” ahead for Tesla, but said the outlook would improve once the company achieved “autonomy at scale in the second half of next year.”
With Post wires