Tesla shareholders have approved a record-breaking compensation package for Elon Musk that could make him the first trillionaire in history, reaffirming their faith in the electric vehicle maker’s CEO despite recent challenges facing the company.
At the company’s annual meeting in Austin, Texas, on Thursday, more than 75% of shareholders voted in favor of reinstating the multibillion-dollar pay plan, which had been voided earlier this year by a Delaware court. The plan grants Musk stock options valued at up to $1 trillion if Tesla achieves a series of aggressive performance targets over the next decade.
“Fantastic group of shareholders,” Musk said after the vote, adding, “Hang on to your Tesla stock.”
Investor Confidence Amid Falling Sales
The approval marks a significant victory for Musk, whose leadership has faced growing scrutiny as Tesla grapples with slowing demand, shrinking market share, and tighter competition in the global electric vehicle market.
Just days before the vote, European sales data revealed that Tesla’s car deliveries plunged again last month, including a 50% drop in Germany. Despite these setbacks, many investors continue to view Musk as a visionary capable of transforming entire industries—an image reinforced by his past success in turning Tesla from a near-bankrupt company into one of the world’s most valuable automakers.
Still, critics argue that the board’s decision reflects an excessive dependence on Musk’s leadership. Large institutional investors such as CalPERS, the California Public Employees’ Retirement System, and Norway’s sovereign wealth fund voted against the package, citing concerns about corporate governance and executive overreach.
Ambitious Goals Tied to Massive Reward
Musk’s pay plan, first approved in 2018, ties his compensation entirely to Tesla’s performance. To receive the full payout, Musk must increase the company’s market capitalization to nearly six times its current value, deliver 20 million electric vehicles over the next decade, and deploy 1 million humanoid robots — a project Musk claims could revolutionize work and home life.
The goals are among the most ambitious in corporate history. Achieving even part of them could earn Musk tens of billions of dollars in newly issued stock options along the way, steadily increasing his ownership stake.
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According to Forbes, Musk’s net worth currently stands at approximately $493 billion, putting him ahead of every other living billionaire but still below historical figures like industrialist John D. Rockefeller, whose wealth peaked at an inflation-adjusted $630 billion.
Board and Watchdogs Divided Over Governance
The compensation plan has divided both investors and governance experts. Proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis both urged shareholders to reject the deal, calling it “excessive” and pointing to the board’s close ties to Musk. In response, Musk lashed out at the firms, labeling them “corporate terrorists.”
Critics such as automotive analyst Sam Abuelsamid from Telemetry Research argue that the package is unjustified. “He already has hundreds of billions tied up in Tesla,” Abuelsamid said. “To say he needs another trillion to stay motivated is absurd.”
However, supporters contend that the package aligns Musk’s personal ambitions with shareholder interests. Dan Ives, a financial analyst at Wedbush Securities, described the vote as “a massive win for shareholders,” adding, “This AI chapter needs one person to lead it — and that’s Musk.”
The AI Future of Tesla
Musk has long emphasized that Tesla’s future lies not only in electric vehicles but also in artificial intelligence. The company is developing self-driving software capable of operating vehicles without steering wheels and humanoid robots intended for both industrial and domestic use.
Supporters believe this next stage of development could redefine Tesla as an AI and robotics company, rather than merely an automaker. For Musk, the approval of the compensation plan reinforces his authority to steer the company through that transformation.
Musk told investors the package was “not about the money” but about increasing his stake in Tesla to nearly 30%, giving him greater control over the company’s strategic direction. He has also said that he wants more influence over Tesla’s AI and robotics operations to ensure they are managed responsibly, citing potential “dangers to humanity” if misused.
Shareholder Decisions Beyond Musk’s Pay
In addition to approving Musk’s pay deal, Tesla shareholders passed several other resolutions favorable to the CEO. They voted to allow the company to invest in Musk’s artificial intelligence startup, xAI, which is developing large-scale generative AI systems designed to compete with models from OpenAI and Google.
However, shareholders rejected a proposal that would have made it easier for investors to sue Tesla by lowering the minimum ownership threshold for legal action. The current rule, which remains in place, requires investors to hold at least a 3% stake to bring a case.
Tesla shares rose briefly in after-hours trading following the vote, reaching $445.44, before stabilizing. The company’s stock is up roughly 80% over the past year, reflecting both investor optimism and volatility tied to Musk’s leadership.
Outlook: High Stakes for Tesla and Musk
With the shareholder approval secured, Musk faces the challenge of delivering on his bold promises. Analysts note that while the plan could unlock historic wealth for Musk, it also places immense pressure on Tesla to maintain growth amid slowing global demand for electric vehicles and intensifying competition from Chinese and European automakers.
If Musk succeeds, he could become the world’s first trillionaire — and cement his status as one of the most transformative figures in modern corporate history. If not, the vote may be remembered as one of the most audacious gambles ever made by investors in pursuit of innovation.
Source: AP News – Musk could become history’s first trillionaire as Tesla shareholders approve giant pay package
