Tesla Shareholders Approve Massive Pay Package for Elon Musk
The Live Info Media
At Tesla’s annual meeting in Austin, shareholders voted with over 75% support to approve CEO Elon Musk’s performance-based pay package, potentially worth $1 trillion if the company achieves milestones like $8.5 trillion market capitalization and revenue targets over the next decade. Musk announced plans for Optimus robot production lines producing up to 10 million units annually, claiming the robots could eliminate poverty through universal labor and advanced medical care. He also discussed providing Tesla investors access to SpaceX stock and building a massive AI chip fabrication facility.
Tesla shareholders have overwhelmingly approved a massive pay package for CEO Elon Musk, which could potentially be worth up to $1 trillion if he achieves a series of extremely ambitious performance targets. The proposal was endorsed with more than 75% support at the company’s annual meeting in Austin, Texas.
Aim to Secure Musk’s Future at Tesla
The primary goal of the compensation plan is to ensure Musk’s continued commitment and service to Tesla for at least the next seven-and-a-half years. The company is focusing its future growth on breakthrough technologies in artificial intelligence (AI) and robotics, particularly with projects like autonomous driving, the robotaxi network, and the Optimus humanoid robot. Musk has hinted he might reduce his focus on Tesla if his ownership share was not sufficiently increased to give him more influence over the company’s long-term direction, particularly in AI.
The Road to a Trillion: Ambitious Milestones
Musk will only receive the full payout if Tesla hits 12 separate, extraordinary performance milestones over the next decade. These targets are split into tranches and include both financial and operational goals.
- Financial Goals: Significantly increasing Tesla’s market capitalization from its current level of around $1.5 trillion all the way to $8.5 trillion. The first tranche of the package becomes available when the market value reaches $2 trillion.
- Operational Goals:
- Cumulative delivery of 20 million vehicles.
- Achieving 10 million Full Self-Driving (FSD) subscriptions.
- Producing 1 million humanoid robots (Tesla Bots).
- Deploying 1 million robotaxis into service.
Support and Criticism of the Deal
The board strongly backed the proposal, warning that rejecting the package could lead to Musk stepping away and causing a significant drop in the company’s stock value. Following the vote, cheers of “Elon” erupted, and analyst Dan Ives described the vote as cementing Musk’s position as the leader of the “AI Revolution.”
However, the deal faced significant criticism:
- Activist Opposition: Groups like “Tesla Takedown” called the payout “absurd” and an “expensive participation trophy,” arguing it ignored recent drops in auto sales and safety risks.
- Institutional Opposition: Major proxy advisory firms, including Glass Lewis and Institutional Shareholder Services (ISS), recommended voting against the package, calling its size excessive and noting that Musk’s financial interests were already closely tied to Tesla’s success.
- Controversy: The move also followed a protracted legal battle over a previous $55.8 billion pay package from 2018, which was repeatedly blocked by a Delaware court, prompting Tesla to re-incorporate in Texas.
Impact on Musk’s Ownership
If all the milestones are met, the new stock grants would significantly increase Musk’s stake in Tesla from about 12% when the package was proposed to potentially more than 25% of the company. Musk, already the world’s richest person, has suggested that his desire for a higher stake is driven by the need for more control over Tesla’s future, especially its potential “robot army.”
