Tesla investors have given their backing to a record-breaking pay package for Elon Musk that could reach nearly $1 trillion. The decision, supported by 75% of votes at Thursday’s annual meeting, was met with cheers from the audience.
Musk, already the world’s wealthiest individual, must significantly raise Tesla’s market value over the next decade to unlock the full reward. If he achieves all performance goals, he will receive hundreds of millions of new Tesla shares.
The scale of the payout has drawn sharp criticism, but Tesla’s board argued that Musk could leave if the deal failed. They insisted the company cannot afford to lose its key leader.
Musk celebrates with his trademark showmanship
After the vote, Musk stepped onto the stage in Austin, Texas, dancing to chants of his name. “We’re not just turning a page in Tesla’s story, we’re writing an entirely new book,” he told the crowd.
He added with a smile, “Other shareholder meetings are boring. Ours are incredible. Look at this energy.”
To receive his full payout, Musk must increase Tesla’s market capitalization from $1.4 trillion to $8.5 trillion and launch one million self-driving Robotaxi vehicles into operation.
Spotlight turns to the Optimus robot
At the meeting, Musk shifted attention to Tesla’s humanoid robot, Optimus, instead of focusing on electric vehicles. The move surprised many investors and analysts.
“Let it sink in where Musk’s mind is,” wrote Gene Munster, managing partner at Deepwater Asset Management, on X. “His new vision starts with Optimus. Still no mention of cars, self-driving, or robotaxis.”
Later, Musk discussed Tesla’s full self-driving system, saying the company was “almost comfortable” allowing drivers to “text and drive essentially.”
Safety investigations continue over Tesla’s technology
US regulators continue to investigate Tesla’s self-driving software after several incidents in which cars drove through red lights or on the wrong side of the road. Some of these incidents caused crashes and injuries.
Despite ongoing scrutiny, Tesla’s share price rose slightly after hours and has climbed more than 60% over the past six months.
Political ties and reputation risks
Tesla’s sales have fallen in the past year after Musk publicly aligned himself with former US President Donald Trump. Their relationship collapsed earlier this year, adding pressure to Tesla’s public image.
Investor Ross Gerber, chief executive of Gerber Kawasaki, called Musk’s deal “another unbelievable chapter in business history.” But he warned that Tesla faces significant challenges ahead.
Gerber questioned the demand for humanoid robots and noted Tesla’s growing competition in the robotaxi market from companies like Waymo.
He said his firm reduced its Tesla holdings because “Musk’s polarising image” has “damaged the brand’s value.” “Elon seems disconnected from the reality that his popularity among the public has dropped,” he added.
Analysts praise Musk despite controversy
Dan Ives, a senior analyst at Wedbush Securities, called Musk “Tesla’s greatest asset.” In a note published after the vote, he wrote, “Tesla’s AI-driven value is beginning to emerge. The next stage of growth has already started.”
Musk already owns about 13% of Tesla shares. Shareholders had previously approved a massive pay package tied to a tenfold rise in the company’s market value—a goal Musk successfully achieved.
Legal challenges and Tesla’s shift to Texas
A Delaware judge later overturned that earlier pay deal, arguing that Tesla’s board was too closely connected to Musk. In response, Tesla moved its legal headquarters from Delaware to Texas. The Delaware Supreme Court is now reviewing the case.
The new compensation plan faced opposition from major institutional investors, including Norway’s sovereign wealth fund and the California Public Employees’ Retirement System, the largest public pension fund in the United States.
Because of their resistance, Musk relied on Tesla’s unusually large base of retail investors to secure the deal.
Tesla board rallies behind Musk’s pay deal
Musk and his brother Kimbal, who serves on Tesla’s board, were both allowed to vote at Thursday’s meeting. In the weeks before the event, Tesla’s directors launched an aggressive campaign to encourage shareholders to support the package.
A video on votetesla.com featured board chair Robyn Denholm and director Kathleen Wilson-Thompson praising Musk’s leadership and his long-term vision for Tesla’s future. The campaign sparked criticism from corporate governance experts who said it blurred the boundary between promotion and shareholder influence.
