Tesla shareholders approved a $1 trillion pay package for Musk
Tesla shareholders on Thursday approved a new $1 trillion pay package for CEO Elon Musk.
The package — approved by more than 75% of shareholders — gives Musk about 423 million shares in the electric vehicle (EV) maker, which would be worth about $1 trillion if the company reaches a series of milestones as required by the agreement. This could make the tech mogul, already the richest person in the world, the world’s first ever trillionaire.
This represents a major win for both Musk and Tesla’s board of directors, which defended the new pay package in the face of opposition from some key advisers and shareholders. The board argued that the pay increase was necessary to maintain Musk’s focus on the company.
When the electric car maker initially floated the proposal in September, it said it was “essential to Tesla’s continued success and transformational growth that Mr. Musk be retained and highly motivated to focus a significant amount of his time and efforts toward realizing his vision for Tesla.”
Musk’s focus on the company became a major concern for investors this year, when he joined the Trump administration as the leading force behind the Department of Government Efficiency (DOGE).
While Tesla investors initially seemed optimistic about Musk’s close relationship with President Trump after the 2024 election, his government work ultimately proved problematic for the electric car maker as he became an alternative to the billionaire’s controversial work at DOGE.
The tech billionaire stepped down from management in late May. However, he remained at the center of political talks, publicly falling out with the president and announcing a new political party.
He has largely avoided the spotlight in recent months, and Tesla shares have recovered from the heavy losses they suffered in the first half of the year.
The pay package presented by the company’s board calls for its market value to reach $8.5 trillion over the next 10 years. Tesla is currently valued at $1.4 trillion, and only one company in the world, Nvidia, has so far managed to surpass $5 trillion.
It would also require Tesla to deliver 20 million vehicles and 1 million robots, secure 10 million active subscriptions to its full self-driving system, and reach 1 million commercially operating robotaxis.
The latest pay package is structured similarly to Musk’s 2018 compensation agreement, which was initially worth about $56 billion. However, the previous pay package remained tied up in court, after a Delaware judge struck it down last year.
Several major groups have opposed the push to approve Musk’s potential trillion-dollar payday. Two proxy advisory firms, ISS and Glass Lewis, recommended that shareholders vote against the pay package, according to Reuters.
Norway’s sovereign wealth fund also voted against the measure, stating that it was “concerned about the overall size of the award, the dilution, and the lack of dilution of the risks of key persons – consistent with our views on executive compensation.”
