Elon Musk’s showdown with Tesla investors ended in victory Thursday, as shareholders overwhelmingly signed off on an unprecedented $1 trillion compensation plan—after he warned he might walk away if it didn’t pass.
The massive payout, the biggest in corporate history, could make Musk the first trillionaire on the planet. But to claim it, he must meet a demanding set of milestones over the next ten years. Musk, 54, already tops the global wealth rankings, with an estimated $490.1 billion fortune, according to Forbes.
The structure of the deal splits Tesla stock into 12 separate tranches. The first payout comes only if Tesla’s market value hits $2 trillion and the company rolls out 20 million vehicles. Another phase triggers when Tesla reaches a $3 trillion valuation and produces one million “Optimus” humanoid robots.
If the automaker clears every target, Tesla’s worth would skyrocket to about $8.5 trillion, giving Musk control of roughly a quarter of the company’s shares.
Even limited success could mean astronomical gains. Should Tesla only meet the first two benchmarks, Musk alone would pocket $26 billion—an amount exceeding the total career pay of Mark Zuckerberg, Tim Cook, and Jensen Huang combined, according to Reuters.
Roughly three-quarters of shareholders backed the pay plan, according to preliminary results released at Tesla’s annual meeting. The show of support was a major boost for Musk after a turbulent period in which slumping sales had weighed on Tesla’s stock price.
For the company’s board, the result was equally crucial. Executives had cautioned investors that Musk might abandon the company entirely if the plan was voted down.
Not everyone was thrilled. The payout drew sharp criticism from several quarters, including Pope Leo XIV, who said it defied “the value of human life, of the family, of the value of society.” Norway’s sovereign wealth fund, one of Tesla’s biggest institutional investors, also opposed the measure.
Leading proxy advisors ISS and Glass Lewis recommended shareholders reject the deal, calling it excessive. Musk, undeterred, countered on Oct. 29, posting that “control of Tesla could affect the future of civilization.”
Longtime investor Ron Baron publicly supported the compensation package, praising Musk’s unmatched energy and vision. “Without his drive and uncompromising standards, there would be no Tesla,” he said.
The new plan also places no restrictions on Musk’s political involvement—a sticking point for some investors who had tied his collaboration with President Trump’s Department of Government Efficiency to declining Tesla sales earlier this year.
Tesla’s board insists the company’s ambitious future—centered on self-driving cars and fleets of “Optimus” humanoid robots—requires Musk’s leadership. “If we build this robot army, do I have at least a strong influence over that robot army?” Musk asked on an earnings call. “I don’t feel comfortable building that robot army if I don’t have at least a strong influence.”
The proposal came together after a Delaware judge invalidated Musk’s earlier $56 billion pay deal, ruling that it was “excessive” and tainted by conflicts of interest. Furious at the decision, Musk promptly switched Tesla’s legal home from Delaware to Texas.
Ahead of the shareholder meeting, prediction platform Kalshi forecasted a 92% likelihood that investors would approve the plan. Tesla’s board, in a statement posted to its website before the vote, urged them to do just that: “the future of Tesla is in your hands.”
“We are at a pivotal juncture in Tesla’s history, and the proposals the Special Committee has carefully designed and the Board has put forward will help determine Tesla’s future,” the statement said. “If you believe, like us, that Elon is the CEO that can make our ambitious vision a reality, vote NOW.”
Despite the ups and downs, Tesla shares have risen nearly 20% this year. Investors appear to be betting on Musk’s ability to steer through weak earnings, a maturing product lineup, and aggressive new competition from Chinese rivals like BYD.
Still, Musk himself acknowledged in July that the next few months could be bumpy. “I see a few rough quarters ahead,” he said, though he added that Tesla’s trajectory would shift once the company achieved “autonomy at scale in the second half of next year.”
{Matzav.com}