Tesla shareholders have approved an unprecedented pay deal for Elon Musk that could be worth nearly $1 trillion. The vote passed with 75% support at the company’s annual meeting on Thursday, followed by loud cheers from the crowd.
Musk, already the world’s richest person, must massively increase Tesla’s market value over the next decade to claim the full payout. If he meets all targets, he will receive hundreds of millions of new Tesla shares.
Critics have condemned the scale of the reward, but Tesla’s board warned that Musk might leave without it. They insisted that the company cannot risk losing its visionary leader.
Celebration in Austin as Musk takes the stage
After the results were announced, Musk appeared on stage in Austin, Texas, dancing to chants of his name. “We are not just opening a new chapter in Tesla’s story, but writing a whole new book,” he told shareholders.
He added jokingly, “Other shareholder meetings are boring. Ours are incredible. Just look at this energy.”
To earn his massive reward, Musk must raise Tesla’s market value from $1.4 trillion to $8.5 trillion and deploy one million fully self-driving Robotaxi vehicles for commercial use.
Musk shifts focus to the Optimus robot
Musk opened the meeting by spotlighting Tesla’s humanoid robot, Optimus. His remarks frustrated some analysts who hoped for renewed attention on the company’s electric vehicle business.
“Let it sink in where Musk’s head is,” wrote Gene Munster, managing partner at Deepwater Asset Management, on X. “His vision of the ‘new book’ starts with Optimus. Still no mention of cars, full self-driving, or robotaxis.”
Musk later addressed Tesla’s full self-driving software, saying the company is “almost comfortable” letting drivers “text and drive essentially.”
Regulators probe Tesla’s self-driving feature
US safety officials continue to investigate Tesla’s self-driving system after reports of cars ignoring red lights or driving on the wrong side of the road. Some of these incidents led to crashes and injuries.
Despite the scrutiny, Tesla’s stock rose slightly in after-hours trading and has climbed more than 62% in the last six months.
Political controversies and business challenges
Tesla’s sales have dipped over the past year as Musk’s public alignment with former US President Donald Trump stirred backlash. Their relationship collapsed earlier this year, adding to Tesla’s public relations challenges.
Investor Ross Gerber, head of Gerber Kawasaki, called Musk’s new pay plan “another unbelievable moment in business history.” But he warned that Tesla faces tough times ahead despite Musk’s ambitions.
Gerber questioned whether the world is ready for humanoid robots and pointed to rising competition in the robotaxi market from companies like Waymo.
He revealed that his firm recently reduced its Tesla stake, citing “the polarisation of Musk’s persona” that has “damaged the brand’s value.” “Elon seems disconnected from the reality that his popularity is at a low point,” he added.
Analysts back Musk as Tesla’s strongest asset
Dan Ives, a technology analyst at Wedbush Securities and long-time supporter of Musk, called him “Tesla’s biggest asset.” In a research note, Ives wrote, “The AI value of Tesla is beginning to unfold. The next phase of AI-driven growth has started.”
Musk already owns about 13% of Tesla shares. Shareholders had previously approved a multibillion-dollar deal tied to a tenfold increase in Tesla’s value—a goal Musk achieved.
Legal setbacks and corporate reshaping
A Delaware judge later struck down that earlier pay package, ruling that Tesla’s board was too close to Musk. In response, Tesla moved its legal headquarters from Delaware to Texas. The Delaware Supreme Court is now reviewing the decision.
The new compensation plan faced opposition from major institutional investors such as Norway’s sovereign wealth fund and the California Public Employees’ Retirement System, the largest US public pension fund.
Because of that pushback, Musk relied heavily on Tesla’s army of retail investors, who together hold an unusually large share of the company’s stock.
A coordinated campaign to back Musk
Both Elon and his brother Kimbal Musk, who serves on Tesla’s board, were allowed to vote at Thursday’s meeting. Ahead of the vote, Tesla’s board members launched an intense campaign to rally support.
A promotional video on votetesla.com featured board chair Robyn Denholm and director Kathleen Wilson-Thompson praising Musk’s leadership and vision. The campaign drew criticism from some corporate governance experts who said it blurred the line between marketing and shareholder lobbying.
