Tesla shareholders approve Elon Musk’s $1 trillion payday

Elon Musk just got the richest compensation package ever given to a CEO, a gamble to keep him firmly at the wheel of the company he built – and the board that can’t seem to lead without him.

In a vote Thursday, Tesla shareholders in Austin, Texas, approved the pay package, which is worth up to $1 trillion if Musk realizes his dreams of robotaxis, humanoid robots and a market capitalization six times Tesla’s current size. The automaker reportedly said more than 75% of voting shares supported the package.

The milestones, set over the coming decade, are as imposing as this figure itself: a market capitalization of $8.5 trillion, compared to around $1.5 trillion today; adjusted EBITDA of approximately $400 billion; sell 20 million cars; and the deployment of a million robotaxis and Optimus robots over the next decade. Meeting those goals would increase Musk’s stake from about 15% to 25%, a transfer of control that would give him the increased influence he has long sought.

Musk spent months pitching a new pay package as both a reward and a necessity — the cost of keeping him focused on the company that bears more of his name than his title. During Tesla’s latest earnings conference call, he linked his desire for more control directly to his vision of a mechanized empire: “If we build this army of robots, do I at least have a strong influence over this army of robots?” “, he asked. The board of directors, for its part, seems keen to leave it up to him.

Supporters of the compensation plan have said Tesla’s vision relies on the vision and presence of one person: Musk. Last week, board chairwoman Robyn Denholm called the vote an “inflection point” for the company, warning that its failure could have caused Musk to step aside — or “not foster an environment that motivates Elon to achieve great things,” as she put it — “costing Tesla significant value.” Longtime Tesla bull Dan Ives echoed the sentiment, calling Musk the company’s “greatest asset” and saying the vote marks a “crucial moment” in the “AI revolution,” where autonomous systems and robotics are “at the forefront.”

But Musk has been promising an AI revolution at Tesla for years: robot taxis, humanoid workers, cars that drive themselves while their owners sleep. What emerged was a series of demos, delays and prototypes. The first dedicated robotaxi was revealed in 2024, which isn’t exactly what Musk promised years earlier; in 2019, he declared that “next year, for sure, we will have more than a million robo-taxis on the road”. This year, some finally are: a small pilot fleet crossing Austin under human supervision.

Musk was equally optimistic about Optimus, the humanoid robot first introduced in 2022, which now performs routine factory tasks but has not ventured beyond that. Last year, Musk said Tesla could start selling Optimus by the end of 2025, another deadline that now clashes with reality. In typical Musk fashion, he has already projected that Optimus will be “bigger than the automotive industry itself.” But for all the talk of autonomy, the future of business remains stubbornly manual.

The package sets an extreme benchmark for CEO compensation – not only in terms of size, but also in what it formalizes. It rewrites the relationship between performance and power, transforming a compensation plan into a mode of governance. Even by Silicon Valley standards, this is a new kind of precedent.

This year, Musk has promised to stay focused on Tesla. He’s done just about everything except political detours to Washington, courting far-right leaders, and so on. And Musk’s AI startup, xAI, now shares data and hardware with Tesla, blurring the lines between the companies he owns and those that pay him. For shareholders, this creates an uncomfortable symmetry: Musk keeps telling investors that his attention is invaluable, even as Tesla continues to pay more for it.

Opposition to the pay package has been strong. The $1.6 trillion Norwegian fund – Tesla’s ninth largest shareholder – voted no, calling the deal before the vote “excessive size” and “too dilutive.” Proxy advisers ISS and Glass Lewis echoed the sentiment, warning that the plan could transfer “an unprecedented amount of wealth” with little evidence of restraint. (Musk later called them “terrorists” during Tesla’s latest earnings conference call.)

Governance players — CtW, CalPERS, the New York State Pension Fund — have also lined up in opposition, arguing that the deal would consolidate Musk’s control while purporting to limit it. CalPERS said in a statement that the pay package is “several orders of magnitude larger than that of CEOs of comparable companies” and “would further concentrate power in the hands of a single shareholder.”

Dissent never seemed to stand much of a chance. Tesla’s board of directors, seen by some as operating on autopilot, largely follows the whims of the man behind the wheel. But even if a $1 trillion payday can survive a few angry shareholders, it can’t be easily shaken by the reminder that Tesla’s governance model begins and ends with the man who designed it.

Musk’s previous compensation package, worth nearly $56 billion, was destroyed in January 2024 by a Delaware judge, Chancellor Kathaleen McCormick, who called it “deeply flawed” and the board “lying” to its CEO. The judge further said Musk “controlled Tesla” and wondered aloud whether anyone had ever asked “the $55.8 billion question” — whether the package was even necessary — and ruled that shareholders were not “fully informed” when they approved it. This decision – still under appeal – contributed to Tesla’s relocation to Texas, where the rules are more favorable to founders and much less lenient towards dissidents.

That means any legal challenge to pay this time around probably won’t resemble the original.

Under Tesla’s new bylaws, only investors owning at least 3% of the company’s shares can file a lawsuit on its behalf. The rest will have to settle for complaining about X – or filing federal disclosure lawsuits that will likely go nowhere quickly. Tesla also said the Texas Business Court was the exclusive venue for “infighting,” thereby excluding Delaware altogether. This change makes shareholder protests less likely, slower and more costly – more trench warfare than open revolt. This combination pushes most retail investors into cheap seats and makes copy-and-paste versions of the Delaware challenge unlikely.

Groups critical of Elon Musk have raised security concerns following the passage of the salary package.

“Security investigations are increasing, customers are turning to competitors and market share continues to decline,” Tesla Takedown said in a statement. “It’s not a rewarding performance, it’s a failure. Musk just won the world’s most expensive participation trophy while Tesla burns,” he added.

“Autonomous vehicles have the potential to save lives and be a transformative technology, but only if they are deployed responsibly,” said Shua Sanchez, director of the SAVE-US campaign. “This compensation plan creates a dangerous financial incentive to rush partially autonomous vehicles and robo-taxis onto public roads before they are proven safe.”

Thursday’s vote may have been about compensation, but the subtext was governance. Tesla has cemented a salary plan the size of a national budget. Its adoption signals that the balance of power is as concentrated as the company’s ambition.

The trillion-dollar vote settles one question: Is Musk still the one pulling the levers at Tesla? – but that opens up another question: what exactly is Musk planning to build with this control?