Tesla says shareholders approve Musk’s $1 trillion pay plan

Tesla’s He said that shareholders voted for CEO Elon Musk’s approximately $1 trillion salary plan and 75 percent of the voting shares supported it.

Board members recommended that shareholders approve the payment plan they introduced in September. Senior proxy advisers Glass Lewis and ISS recommended voting against it.

The results of the vote were announced Thursday at the company’s annual shareholder meeting in Austin, Texas.

Musk’s package, currently the richest person in the world, consists of 12 slices of shares that will be given if Tesla reaches a certain target. milestones in the next ten years. This would also give Musk increased voting power over the company by agreeing to demands he has been making public since early 2024. Its ownership will increase from approximately 13% to 25%, adding more than 423 million shares to its holdings.

If Tesla’s market value reaches $2 trillion, the first tranche of shares will be paid. Tesla’s current market cap is $1.54 trillion.

The next nine tranches will be awarded if Tesla’s value rises in $500 billion increments to $6.5 trillion. Musk will win the final two tranches if the market cap increases in increments of $1 trillion, meaning Musk would need to reach $8.5 trillion to get the full package.

Other targets linked to the payment plan include reaching 20 million vehicle deliveries, 10 million active FSD (Full Self-Driving) subscriptions, 1 million robot deliveries and 1 million robotaxis in commercial operation. Tesla has delivered more than 8 million vehicles to date, according to its September proxy statement.

The proposed plan does not specify whether FSD subscriptions will need to be purchased or whether it will include free trials. Tesla currently provides partially automated driving systems in the US, which it markets as “FSD Supervised”. The company plans to develop its FSD Supervised systems so that they do not require human supervision on board.

Tesla also unveiled a series of earnings milestones, ranging from $50 billion to $400 billion in annual adjusted profit. In the third quarter, Tesla reported adjusted EBITDA of $4.2 billion.

Like Reuters previously reportedMusk can make tens of billions of dollars without even reaching most of the goals set for him by his board of directors, and he can raise more than $50 billion by reaching just a few achievable goals.

Also included in the award terms is a list of “covered activities” that would allow Musk to earn shares without meeting required operational milestones.

Covered events include natural disasters, wars, epidemics, and changes in “international, federal, state, and local laws, regulations, or other governmental action or inaction” that could impede the company’s ability to design, manufacture, or sell its products.

Shareholders voted on the plan after the Delaware Court of Chancery ruled last year that Musk’s early 2018 compensation plan was improperly granted by Tesla’s board and should be rescinded. Musk appealed this decision and the matter will be decided by the Delaware State Supreme Court.

In addition to leading Tesla, Musk also runs xAI, which merged with X, runs SpaceX and satellite internet business Starlink, and is the founder of brain-computer interface company Neuralink and tunneling startup The Boring Company.

He is also heavily involved in politics; most notably working to return President Donald Trump to the White House and then leading a sweeping effort to cut the federal government at the start of his second term.

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WRISTWATCH: Tesla shareholders approve Musk’s salary plan