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Tesla Shareholders Greenlight $1 Trillion Pay Package for Elon Musk

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On Thursday, Tesla shareholders ratified a $1 trillion compensation plan for CEO Elon Musk, potentially granting the world’s wealthiest individual the largest corporate payout in history, contingent on meeting specified targets.

Despite opposition from several notable investors, the compensation framework underscores shareholders’ confidence in Musk’s ability to steer the automaker through an era increasingly influenced by robotics and artificial intelligence.

The results were announced during the company’s annual shareholder meeting in Austin, Texas, where over 75% of attendees voted in favor. Following the announcement, enthusiastic shouts of “Elon” filled the venue.

“Thank you, everyone,” Musk expressed after performing a brief dance alongside the company’s Optimus robot.

Musk emphasized that the Optimus robot, which is yet to achieve mass production, represents both Tesla’s future and humanity’s. He reiterated that it could become the “biggest product ever,” with applications ranging from healthcare to correctional facilities.

“Imagine having a free Optimus that follows you and prevents criminal behavior,” Musk remarked. “We can move away from jail systems. The possibilities are astonishing.”

He previously indicated that he sought a compensation package granting him greater control over the company and “stronger leverage over the robot army” under development.

Musk’s astronomical compensation is comparable to the GDP of entire nations, surpassing that of Ireland, Sweden, and Argentina, and outstrips federal allocations for major government programs.

Critics, including some shareholders, contended that concentrating such power in a single, unpredictable leader overlooks the obstacles facing the company.

“Elon Musk just earned $1 trillion despite setbacks. Sales are declining, safety issues are rising, and his political views may alienate customers. This isn’t true leadership; it’s the world’s priciest participation trophy,” stated the protest group Tesla Takedown.

Should Musk meet the high benchmarks of his salary package, he could become the world’s first trillionaire. This requires Tesla to boost its market capitalization to $8.5 trillion, eightfold its current worth. Additionally, he needs to roll out millions of self-driving cars and humanoid robots, while maintaining substantial revenue over the forthcoming decade.

The compensation goals, which are distributed across 12 tranches, outline a roadmap for Tesla to achieve this monumental market capitalization. If successful, Musk will be eligible to liquidate an additional 12% of his shares after committing to the company for a minimum of seven and a half years. He will also have to help devise a comprehensive succession plan for the firm he has directed for over two decades.


In addition to the shares guaranteed under the 2018 package, the new compensation plan will leave Musk with a 25% ownership stake in Tesla. As of November 5, Tesla’s stock was trading around $450 per share, close to its 52-week high.

Over the next decade, Musk is tasked with delivering 20 million Tesla electric vehicles, securing 10 million active fully self-driving subscriptions, manufacturing 1 million humanoid robots, and deploying 1 million robotaxis for commercial use.

Additionally, Musk must enhance the company’s underlying profits to $400 billion for four consecutive quarters. Tesla’s profit for the third quarter of 2025 stood at $4.2 billion, marking a 9% decline from the previous year.

As of November, Musk’s net worth reached $460 billion, making him the richest person globally. Bloomberg Billionaires Index.

Restoration of Canceled Packages

Shareholders also validated a compensation package for Musk after his 2018 plan was nullified by a Delaware court. The plan, valued at approximately $56 billion, faced challenges from a shareholder who ultimately prevailed. Delaware’s Court of Chancery has twice invalidated Musk’s pay structure.

Following the initial cancellation of his 2018 compensation plan, Musk relocated Tesla’s headquarters from Delaware to Texas. He stated that SpaceX and other corporate headquarters have similarly made the move. In 2024, shareholders once again endorsed the pay package under Texas law.

However, Delaware’s “court of equity” has ruled against one of the largest CEO compensations in modern times yet again. In light of this adverse ruling, Musk expressed dissatisfaction with the state and its activist judge, further fueling an exodus of corporations Delaware lawmakers are attempting to curb through legislation.

“He had a significant platform,” commented Lawrence Hammermesh, a professor emeritus at Widener University Delaware School of Law and a former corporate lawyer. “There seems to be more to this transition than just Musk stirring the pot, but it likely had an impact.”

In assessing whether Musk had excessive influence in securing his 2018 compensation package, Eric Talley, a Columbia Law School professor, noted that the judge found that other “superstar CEOs” like Meta’s Mark Zuckerberg and Amazon’s Jeff Bezos had not received comparable incentive-based contracts.

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How Tesla Shareholders Can Help Elon Musk Become the World’s First Trillionaire

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If Elon Musk can elevate Tesla’s shareholder value to over $8 trillion within the next decade, he may become the world’s first trillionaire.

This is contingent upon shareholders endorsing a revised compensation plan for the company’s “superstar CEO,” as one judge once referred to him. The annual general meeting is set to take place Thursday afternoon in Austin, Texas.

“If Mr. Elon fulfills all performance benchmarks under this principles-based 2025 CEO Performance Award, his leadership will position Tesla as the most valuable company in history,” states the Company Annual Proxy Statement. I take pride in that.

The forward-looking aspect of Mr. Musk’s $1 trillion compensation isn’t the sole matter on the agenda. Shareholders will also evaluate alternatives for compensating Musk the estimated $56 billion still owed from his 2018 compensation plan. Moreover, the company urges shareholders to reject several other proposals, including one advocating for child labor audits. Previous compensation packages have been invalidated twice by Delaware courts, with an appeal pending in the state Supreme Court, and the company aims to ensure Musk is compensated regardless of the ruling.

The road to $1 trillion

The 2025 package encompasses goals beyond merely increasing the company’s market capitalization.

The defined milestones are split into 12 “tranches,” each presenting its own unique objective. The initial milestone, or tranche, necessitates achieving a market capitalization of $2 trillion. The following nine require an additional $500 billion growth, culminating in $8.5 trillion by 2035. Every financial milestone is supplemented by product development prerequisites.

To secure an additional 12% equity stake in the company over the next decade, Musk must also deliver 20 million Tesla electric vehicles, obtain 10 million active fully autonomous driving subscriptions, launch 1 million humanoid robots, and introduce 1 million robotaxis into commercial use. Additionally, he is expected to elevate the company’s profits to $400 billion for four consecutive quarters. Actual revenue for Q3 2025 was $4.2 billion, reflecting a 9% year-over-year decline.

Ultimately, Musk must increase Tesla’s market capitalization from around $1 trillion to $8.5 trillion by 2035. He must also invest in the company for at least seven-and-a-half years and contribute to developing a long-term succession plan. As he amplifies his company’s value, the value of his shares—and his wealth—will consequently rise.

The company noted in its proposal that achieving these milestones “will be extremely difficult and challenging for both Tesla and Musk personally.” Realizing these financial targets would position Tesla to be valued similarly to the combined worth of Meta, Microsoft, and Google’s parent company, Alphabet.

Some believe Mr. Musk is capable of achieving this. He continues making billions, even if he falls short of all the milestones.

Courting a “superstar CEO”

Tesla board chairman Robin Denholm issued a public warning recently, stating that a “no” vote on the 2025 compensation plan could jeopardize Musk’s position as CEO.

In a memo to shareholders, Denholm and board member Kathleen Wilson Thompson acknowledged that Musk “has not received meaningful compensation in eight years,” owing to a legal dispute regarding a prior compensation plan from 2018. They emphasized that Musk’s achievements during the earlier agreement elevated Tesla’s market capitalization to $735 billion.

Should Musk secure a new compensation plan alongside his 2018 package, he would ultimately control over 25% of Tesla shares. As of November 5, Tesla stock was trading around $450 per share, close to its 52-week high.

The flow of votes

On November 4th, SEC filings revealed that social media posts by Musk and others influenced some to follow the guidance of advisory group Glass Lewis. Schwab Investment Fund plans to oppose the $1 trillion compensation package.

However, the situation changed rapidly.

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“We firmly believe that backing this proposal aligns management and shareholder interests for the best outcomes for everyone involved,” stated Schwab. The investment firm emphasized it does not solely depend on Glass Lewis or ISS recommendations.

Simultaneously, Norges Bank Investment Management, Norway’s sovereign wealth fund and Tesla’s seventh largest shareholder, declared its intention to vote against the proposed salary package.

“In line with our stance on executive compensation, we are concerned about total compensation, dilution, and insufficient risk mitigation for key personnel,” stated Norges.

In addition to support from current board members and a surge of messages on Musk’s own social media platform X, other stakeholders have also voiced support for the proposal, with at least three additional investment firms already committed to backing it.

Musk, as Tesla’s largest individual shareholder with over 500 million shares, can technically vote in favor of his own pay structure.

“If controlling shareholders could endorse their own compensation, it would undermine a sense of accountability,” remarked Lawrence Hammermesh, a professor emeritus at Widener University Delaware School of Law and a former corporate lawyer.

Tesla’s new headquarters

Tesla has consistently offered its CEO an incentive-based compensation plan, stipulating specific milestones for stock options.

Nevertheless, the last compensation package established in 2018 faced a legal challenge from a shareholder with less than 12 shares during the lawsuit in Delaware Chancellor’s Court. He prevailed, invalidating and canceling the salary package.

In response, Musk criticized the court and requested Tesla to relocate its headquarters from Delaware to Texas. Musk’s public dissatisfaction with the Delaware ruling is believed to have expedited #DExit, a movement where other major companies, including Dropbox and Meta, contemplate moving their corporate headquarters out of Delaware.

“Elon Musk wields significant influence, which extends into corporate law,” commented Eric Talley, Professor, Columbia University Law School. Delaware’s reputation as a “corporate mecca” remains relatively intact “until 2024, when Elon Musk endeavored to rally support,” he added.

Source: www.theguardian.com

Tesla Shareholders Accused of Overstating Robotaxi Potential

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Tesla investors have filed a lawsuit against Elon Musk and the company for allegedly hiding significant risks associated with the firm’s self-driving vehicles.

The class action lawsuit, which alleges securities fraud on behalf of Musk and Tesla, was submitted on Monday evening. Tesla launched its first public trial of its self-driving taxis in late June close to its Austin, Texas, headquarters. Observations from the test included instances of the vehicle accelerating unexpectedly, rapid braking, mounting the curb, driving against traffic, and dropping off passengers in the center of a busy road. The National Highway Traffic Safety Administration (NHTSA), the main regulatory body for U.S. transportation, is probing the pilot testing of Robotaxi.

Investors claimed that Musk and Tesla systematically overstated the effectiveness and potential of autonomous driving technology, which artificially inflated Tesla’s financial forecasts and stock prices. Following the commencement of testing, Tesla’s stock plummeted by 6.1%, erasing about $68 billion in market capitalization.

Shareholders pointed to Musk’s assurances during the April 22 conference call, where he stated that Tesla was “laser-focused” on launching Robotaxi in Austin that June and claimed that their approach to autonomous driving would enable a “scalable and safe deployment across varied terrains and scenarios.”

Tesla has not responded to requests for comments as of Tuesday. The company’s CFO, Vaibhav Taneja, and his predecessor, Zachary Kirkhorn, are also named in the lawsuit.

The growth of Robotaxis is critical for Tesla as it contends with diminishing demand for aging electric vehicles and resistance to Musk’s political views.

Musk, known as the world’s richest individual, claims that the service will reach half the U.S. population by the year’s end, but he first needs to persuade regulators and the public of the safety of his technology. He asserts that Robotaxi services have expanded into the San Francisco Bay Area, where it was previously based; however, regulations have hindered Tesla from offering paid autonomous rides without a new permit, as reported by the Ministry of Automobile.

On August 1, Florida deputies discovered that 33% of a driver’s liability in connection with a 2019 crash involving the self-driving software resulted in the death of a 22-year-old woman, injuring her boyfriend and incurring damages amounting to roughly $243 million. Tesla plans to contest the driver’s liability and will appeal the decision.

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Elon Musk’s $45 Billion Compensation Package Approved by Tesla Shareholders

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Tesla shareholders have given their approval to a contentious referendum regarding CEO Elon Musk’s leadership, resulting in an agreement to pay him $45bn (£35.3bn).

The results, which were released on Thursday, reflect a struggle for the billionaire tycoon to retain the largest compensation package ever awarded to an executive at a publicly traded U.S. company.

“First of all, I want to say I love you guys so much!” said Musk, expressing his elation as he took the stage after the vote.


The vote followed a ruling by a Delaware judge in January that invalidated a previous payment to Musk, which was then valued at about $56bn (£439m), citing lack of board independence from Musk’s influence and an unlawful process in reaching the amount.

The outcome is seen as a win for Musk and the Tesla board, who actively lobbied shareholders to support the deal. It could potentially challenge the judge’s decision to nullify the payment and aid in demonstrating that shareholders were adequately informed about the payment and directors’ relationships with Musk prior to voting.

Tesla’s board cautioned that Musk may sever ties with the company if the package was not approved, but Musk asserted he had substantial backing from investors.

Despite opposition from major shareholders like Norway’s sovereign wealth fund and the California State Teachers Retirement System, as well as proxy advisory firms Glass Lewis and Institutional Shareholder Services, the vote does not automatically guarantee the release of the funds, and further legal debates are expected.

The vote may trigger additional litigation that could prolong legal proceedings, and the approval of relocating Tesla’s legal headquarters from Delaware to Texas could complicate the matter further.

Tesla initially introduced Musk’s compensation package in 2017, which included stock options based on meeting specific company goals. The package was approved by shareholders in 2018 but faced legal challenges alleging board deception and unfairness.

Judge Katherine McCormick of the Delaware Chancery Court criticized Tesla’s board process for determining Musk’s compensation, highlighting conflicts of interest and close relationships with Musk’s associates. Despite this, the board aims to challenge Judge McCormick’s ruling.

Source: www.theguardian.com

Elon Musk Confirms Tesla Shareholders to Vote on $56 Billion Compensation Package

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Tesla shareholders are set to approve Elon Musk’s $56 billion remuneration package by a significant margin before the company’s important annual general meeting later today. The compensation package, the largest ever granted to a CEO of a U.S. company, will be subject to an investor vote after being previously rejected by a U.S. court this year. Shareholders will also vote on Musk’s proposal to relocate Tesla’s legal base to Texas.

Several investors, including Norway’s sovereign wealth fund and the California State Teachers Retirement System, have indicated their intent to oppose the compensation package. Proxy advisory firms Glass Lewis and Institutional Shareholder Services have also advised shareholders to reject the pay.

On the eve of the meeting, Musk suggested on X (formerly Twitter) that investors overwhelmingly supported both the compensation package and the Texas relocation: “Both Tesla shareholder resolutions have now passed by large margins! Thank you for your support!!”

The results will be disclosed at Tesla’s headquarters in Texas at 4:30pm ET (9:30pm UK time).

Even if the remuneration package is approved, Musk may encounter further obstacles, including potential litigation. Legal experts doubt that the Delaware court that rejected the initial package would accept a new, nonbinding vote to reinstate it.

Originally approved by Tesla’s board in 2018, the compensation has faced legal challenges from shareholders. Judge Kathleen McCormick of Delaware raised concerns about the size and necessity of the package in her January ruling.

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In her ruling, McCormick questioned the necessity of the compensation plan, stating, “Perhaps swayed by the ‘all-positive’ rhetoric or enthralled by Musk’s superstardom, the board never asked the $55.8 billion question: Was this plan truly necessary for Tesla to retain Musk and achieve its goals?”

Source: www.theguardian.com

Tesla’s Chairman warns that Elon Musk may step down if shareholders reject $56 billion compensation package

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The chairman of Tesla has suggested that Elon Musk might leave the company if shareholders do not support his $56 billion (£44 billion) pay package, implying that Musk has other opportunities to explore. Despite the vote next week on the CEO’s compensation deal, Robin Denholm emphasized that the decision is not solely about money, as Musk will still be one of the richest individuals regardless of the outcome.

Denholm mentioned that if the June 13 vote does not go in Musk’s favor, he could potentially depart from Tesla or reduce his presence at the company. In 2018, investors approved a similar compensation plan for Musk, which was later invalidated, prompting the board to seek investors’ approval once more.

Denholm emphasized the importance of Musk’s time and energy, stating that while he has many ideas and potential endeavors, Tesla and its owners should be his primary focus. Concerns have been raised by some investors about Musk’s engagement with Tesla given his involvement in other ventures like SpaceX, xAI, and X.

Denholm clarified that the compensation package includes a provision requiring Musk to hold the Tesla shares he receives for five years before selling any of them. With Musk’s net worth at $203 billion, he is currently ranked as the third wealthiest person globally, according to Bloomberg.

ISS and Glass Lewis have advised shareholders to vote against the proposed pay package, citing excessive payouts. Despite differing opinions among major investors, Denholm stressed the need to uphold the 2018 agreement to ensure Musk’s continued dedication and commitment to Tesla.

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In a bid to streamline operations and facilitate growth, Denholm proposed relocating Tesla’s legal domicile to Texas, highlighting the state’s favorable corporate laws and potential for innovation. She noted that Texas legislators and courts are well-equipped to handle Tesla’s future endeavors effectively.

Analyst Dan Ives believes that while Musk is unlikely to leave Tesla entirely, a rejection of the compensation package could lead to his stepping down as CEO and reducing his involvement with the company over time.

Source: www.theguardian.com