Shareholders at Tesla have approved a record-breaking compensation plan for chief executive Elon Musk that could be worth nearly $1 trillion (£760 billion), reaffirming his position at the helm of the electric carmaker.
About 75% of votes backed the unprecedented package, drawing cheers and applause at the company’s annual general meeting on Thursday.
Already the world’s richest man, Musk must significantly boost Tesla’s market value over the next decade to receive the reward. If he achieves a set of ambitious milestones, he could earn hundreds of millions of new Tesla shares.
The extraordinary size of the deal has drawn criticism from investors and analysts, but Tesla’s board argued that the company could risk losing Musk if the proposal was rejected.
After the vote, Musk took the stage in Austin, Texas, dancing as supporters chanted his name.
“What we’re about to embark upon is not merely a new chapter of the future of Tesla, but a whole new book,” he said.
“Other shareholder meetings are snoozefests but ours are bangers. Look at this. This is sick,” he added.
To unlock the full value of the package, Musk must raise Tesla’s market capitalization from $1.4 trillion to $8.5 trillion and deploy one million self-driving Robotaxis.
However, Musk’s remarks largely focused on Tesla’s humanoid robot, Optimus, frustrating analysts who wanted him to concentrate on the core electric vehicle business.
“Let it sink in where Musk’s head is at,” wrote Gene Munster, managing partner at Deepwater Asset Management, on X. “His vision of the ‘new book’ starts with Optimus. No mention of cars, FDS and robotaxi yet.”
Later, Musk mentioned Tesla’s full-self-driving (FSD) system, saying the company was “almost comfortable” letting drivers “text and drive essentially.”
U.S. regulators continue to investigate the self-driving feature after incidents in which Tesla vehicles reportedly ran red lights or drove on the wrong side of the road, causing crashes and injuries.
Tesla shares rose slightly in after-hours trading and are up more than 62% over the past six months. However, sales have slowed since Musk’s brief alignment with former U.S. President Donald Trump, a relationship that fell apart earlier this year.
Tesla shareholder Ross Gerber called the pay deal “another notch in the unbelievable things that you see in business.” The CEO of Gerber Kawasaki added that Tesla still faces major financial and operational challenges.
He questioned demand for humanoid robots and noted Tesla faces fierce competition in the robotaxi market from companies such as Waymo. His firm recently reduced its Tesla holdings due to what he described as the “polarisation of [Musk’s] persona” that has “demolished the value of the brand.”
“Elon seems to be divorced from the reality that his opinion among the public is so low,” he said.
Dan Ives, an analyst at Wedbush Securities and long-time Musk supporter, praised him as “Tesla’s biggest asset.”
“We continue to believe that the AI valuation is getting unlocked, and we believe the march to an AI driven valuation for TSLA over the next 6-9 months has now begun,” Mr. Ives added.
Musk already owns 13% of Tesla’s shares. Shareholders had previously approved another lucrative pay deal when he achieved a tenfold increase in market value, though a Delaware judge later struck it down, citing concerns about the board’s independence.
Tesla subsequently reincorporated in Texas. The Delaware Supreme Court is now reviewing the lower court’s decision.
Several major institutional investors, including Norway’s sovereign wealth fund and California’s CalPERS, opposed the latest package, forcing Musk to rely on Tesla’s large base of retail shareholders.
Musk and his brother Kimbal, who sits on Tesla’s board, were both eligible to vote.
In the weeks leading up to the meeting, Tesla directors launched a public campaign to support the proposal. A video posted on VoteTesla.com showed board chair Robyn Denholm and director Kathleen Wilson-Thompson praising Musk’s leadership.
