Tesla investors have approved an unprecedented pay plan for Elon Musk that could reach close to $1 trillion. The decision, supported by 75% of shareholders at Thursday’s annual meeting, was met with cheers and applause from the crowd.
Musk, already the world’s richest man, must grow Tesla’s market value dramatically over the next decade to unlock the full payout. If he hits all performance goals, he will receive hundreds of millions of new Tesla shares.
Critics called the deal excessive, but Tesla’s board insisted the company cannot afford to lose Musk’s leadership and drive.
Musk takes the stage to celebrate approval
Following the vote, Musk appeared on stage in Austin, Texas, dancing as supporters chanted his name. “We’re not just turning a page for Tesla; we’re starting a whole new book,” he told the cheering audience.
He added, “Other shareholder meetings are boring. Ours are unforgettable. Look at this energy!”
To secure the full payout, Musk must lift Tesla’s market capitalization from $1.4 trillion to $8.5 trillion and roll out one million fully self-driving Robotaxi vehicles worldwide.
A shift in focus toward the Optimus robot
Instead of emphasizing Tesla’s electric vehicle business, Musk spotlighted the company’s humanoid robot, Optimus. The shift frustrated analysts who wanted updates on Tesla’s core car operations.
“Let it sink in where Musk’s priorities are,” wrote Gene Munster, managing partner at Deepwater Asset Management, on X. “His vision starts with Optimus. Still no word on cars, self-driving, or robotaxis.”
Later, Musk mentioned Tesla’s full self-driving software, saying the company was “almost comfortable” allowing drivers to “text and drive essentially.”
Safety concerns remain under regulatory review
US authorities are continuing investigations into Tesla’s self-driving feature after reports of cars ignoring red lights and driving on the wrong side of the road. Some incidents have led to crashes and injuries.
Despite these concerns, Tesla’s stock rose slightly in after-hours trading and has jumped more than 60% over the past six months.
Political ties and public image issues weigh on Tesla
Tesla’s sales have fallen during the past year following Musk’s alignment with former US President Donald Trump. Their relationship later collapsed, adding more controversy to Musk’s public image.
Investor Ross Gerber, CEO of Gerber Kawasaki, called Musk’s compensation “another unbelievable chapter in business history.” He said Tesla faces serious financial and brand challenges despite Musk’s big ambitions.
Gerber doubted the demand for humanoid robots and pointed to competition from robotaxi developers such as Waymo.
He added that his firm cut its Tesla holdings, saying, “Musk’s polarising personality has damaged the brand. Elon seems unaware of how unpopular he has become.”
Analysts still see Musk as Tesla’s key strength
Dan Ives, a tech analyst at Wedbush Securities, described Musk as “Tesla’s most valuable asset.” In a note after the vote, he wrote, “Tesla’s AI valuation is now being unlocked. The company’s next growth phase is starting.”
Musk already owns around 13% of Tesla’s shares. Shareholders had previously backed another multibillion-dollar deal tied to a tenfold rise in company value, which Musk achieved.
Legal hurdles and Tesla’s move to Texas
A Delaware judge struck down that earlier pay plan, ruling that Tesla’s board was too closely connected to Musk. Tesla later shifted its legal base from Delaware to Texas. The Delaware Supreme Court is now reviewing the lower court’s decision.
The new pay deal faced opposition from major institutional investors such as Norway’s sovereign wealth fund and the California Public Employees’ Retirement System, the largest public pension fund in the US.
With those major players against the plan, Musk relied on Tesla’s large number of retail investors to push the deal through.
Tesla board launches campaign for Musk’s approval
Musk and his brother Kimbal, a Tesla board member, were both eligible to vote at Thursday’s meeting. In the run-up to the event, Tesla’s directors launched a vigorous campaign urging shareholders to support the pay plan.
A promotional video on votetesla.com featured board chair Robyn Denholm and director Kathleen Wilson-Thompson praising Musk’s leadership and long-term vision. The campaign drew criticism from governance experts who said it blurred the line between shareholder communication and marketing.
