AUSTIN, Texas (BN24) — 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 did not receive it.
The eye-popping compensation is the largest on record and could make Musk the world’s first trillionaire, although he will 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.
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.
“Fantastic group of shareholders,” Musk said after the final vote was tallied, adding “Hang on to your Tesla stock.”
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. Musk also has to deliver 20 million Tesla electric vehicles to the market over 10 years amid new, stiff competition, more than double the number since the founding of the company.
Even if Tesla only achieves the first two benchmarks, Musk himself will have earned $26 billion, more than the total lifetime pay of Meta’s Mark Zuckerberg, Apple’s Tim Cook and Nvidia’s Jensen Huang combined, according to a recent Reuters analysis.
The vote is a resounding victory for Musk showing investors still have faith in him as Tesla struggles with plunging sales, market share and profits in no small part due to Musk himself. Car buyers fled the company this year as he has ventured into politics both in the U.S. and Europe, and trafficked in conspiracy theories.
The vote came just three days after a report from Europe showing Tesla car sales plunged again last month, including a 50 percent collapse in Germany.
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.”
Musk’s win came despite opposition from several large funds, including CalPERS, the biggest U.S. public pension, and Norway’s sovereign wealth fund. Two corporate watchdogs, Institutional Shareholder Services and Glass Lewis, also blasted the package, which so angered Musk he took to calling them “corporate terrorists” at a recent investor meeting.
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.”
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.”
Supporters said that Musk needed to be incentivized to focus on the company as he works to transform it into an AI powerhouse using software to operate hundreds of thousands of self-driving Tesla cars, many without steering wheels, and Tesla robots deployed in offices, factories and homes doing many tasks now handled by humans.
“This AI chapter needs one person to lead it and that’s Musk,” said financial analyst Dan Ives of Wedbush Securities. “It’s a huge win for shareholders.”
Critics argued that the board of directors was too beholden to Musk, his behavior too reckless lately and the riches offered too much. “He has hundreds of billions of dollars already in the company and to say that he won’t stay without a trillion is ridiculous,” said Sam Abuelsamid, an analyst at research firm Telemetry who has been covering Tesla for nearly two decades. “It’s absurd that shareholders think he is worth this much.”
Jessica Strine, CEO of shareholder advisory firm Jasper Street Partners, said that many shareholders likely felt they had no choice but to support the company and its well-known CEO on the key proxy questions.
Assuming Musk voted his roughly 15 percent stake “for” his own compensation, a win of 75 percent for his $1 trillion package would indicate that only 60 percent of outside investors supported it. At a typical company that level of support for compensation would warrant review of CEO pay by the board but not, she said, at Tesla. “Realistically there is not going to be such a review. Never say never. But, never,” she said.
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.
Investors voting for the pay had to consider not only this Musk promise of a bold, new tomorrow, but whether he could ruin things today. He had threatened to walk away from the company, which investors feared would tank the stock.
For his part, Musk says the vote was not really about the money but getting a higher Tesla stake, it will double to nearly 30 percent, so he could have more power over the company. He said that was a pressing concern given Tesla’s future “robot army” that he suggested he did not trust anyone else to control given the possible danger to humanity.
Ahead of the vote, the Kalshi prediction market projected a 92 percent 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 percent 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. Tesla shares, already up 80 percent in the past year, rose on news of the vote in after-hours trading but then flattened basically unchanged to $445.44.
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.”
Other issues up for a vote at the annual meeting turned out wins for Musk, too. Shareholders approved allowing Tesla to invest in one of Musk’s other ventures, xAI. They also shot down a proposal to make it easier for shareholders to sue the company by lowering the size of ownership needed to file. The current rule requires at least a 3 percent stake.
Musk could add billions to his wealth in a few years by partly delivering these goals, according to various intermediate steps that will hand him newly created stock in the company as he nears the ultimate targets.
That could help him eventually top what is now considered America’s all-time richest man, John D. Rockefeller. The railroad titan is estimated by Guinness World Records to have been worth $630 billion, in current dollars, at his peak wealth more than 110 years ago. Musk is worth $493 billion, as estimated by Forbes magazine.
Musk’s just-approved pay package is worth almost as much as the gross domestic product of Poland, a nation of 36 million people. In fact, a World Bank table of GDP per country in 2024 shows that the $878 billion award would rank just below the Polish economy, at $915 billion. It is double the GDP of Bangladesh, a nation of 174 million people. Only 20 countries had a 2024 GDP larger than the Musk deal, according to the table.
