Key Takeaways
- Tesla shareholders approved Elon Musk’s $1 trillion compensation package with over 75% support
- The deal could make Musk the world’s first trillionaire if he hits ambitious performance targets
- Approval came despite Tesla’s recent sales struggles and opposition from major institutional investors
Elon Musk is on track to become the world’s first trillionaire after Tesla shareholders overwhelmingly approved his massive $1 trillion compensation package. The landmark vote guarantees the Tesla CEO stock worth $1 trillion if he achieves specific performance milestones over the next decade.
More than 75% of voting shareholders at Tesla’s Austin headquarters backed the controversial pay plan on Thursday. “Fantastic group of shareholders,” Musk declared after the results were announced, urging investors to “Hang on to your Tesla stock.”
Shareholder Support Despite Challenges
The approval represents a significant victory for Musk as Tesla faces multiple headwinds. The company has been struggling with plunging sales, shrinking market share, and declining profits. Just three days before the vote, European reports revealed Tesla car sales had collapsed by 50% in Germany.
Many investors supported the package despite Musk’s recent political engagements and what some critics called reckless behavior. The Tesla CEO had hinted he might leave the company if the compensation plan wasn’t approved, raising concerns about potential stock price impacts.
Ambitious Performance Targets
Musk faces extraordinarily challenging conditions to earn the full compensation:
- Increase Tesla’s market value nearly sixfold from current levels
- Deliver 20 million electric vehicles over 10 years – more than double Tesla’s total production to date
- Deploy over 1 million humanoid robots, which Musk calls his “robot army”
The Tesla CEO emphasized that the vote wasn’t primarily about money but about securing greater control. The package will double his stake to nearly 30%, giving him more authority over the company’s direction, particularly regarding AI development and the proposed robot workforce.
Opposition and Support
Despite the overwhelming approval, several major institutional investors opposed the package. Calpers (the largest U.S. public pension fund), Norway’s sovereign wealth fund, and corporate advisory firms Institutional Shareholder Services and Glass Lewis all recommended against the compensation plan.
Musk responded strongly to the criticism, labeling ISS and Glass Lewis as “corporate terrorists” during a recent investor meeting.
Supporters argued that Musk needs strong incentives to maintain focus on Tesla as he works to transform the company into an AI leader. The vision includes operating hundreds of thousands of self-driving vehicles and deploying Tesla robots for various tasks currently performed by humans.
Tesla shares rose 1.5% to $447.27 in after-hours trading following the announcement, adding to the stock’s 80% gain over the past year.
