Tesla shareholders approve $1tn pay package for Elon Musk | Tesla
Tesla shareholders on Thursday approved a $1 trillion compensation plan for CEO Elon Musk, rewarding the world’s richest person with the largest corporate payout in history if he meets required targets.
The pay package, opposed by many high-profile investors, suggests shareholders still believe Musk can lead the automaker in an era dominated by robotics and artificial intelligence.
The outcome of the vote was announced at the annual shareholder event in Austin, Texas, with more than 75% of investors voting in favor of the plan. “Elon” chants broke out in the room upon the news of his approval.
“Thanks, guys,” Musk said after dancing briefly on stage with the company’s Optimus robots.
Musk described Optimus robots, which have not yet started mass production, as the future of both the company and humanity. He reiterated his claim that it would be the “greatest product of all time” and suggested it could be used in everything from healthcare to prisons.
“Now you get a free Optimus and it will just follow you around and stop you from committing crimes,” Musk said. “You don’t need to put people in prisons or anything like that. It’s really crazy to think about the possibilities.”
Musk has previously stated that he wants the pay packet so he can have more control over the company and be able to make a “strong impact on this army of robots” that he has promised to build as the company branches into robotics.
If Musk meets key milestones in the pay package outlined at the meeting He could become the world’s first trillionaire at the annual meeting. To do this, he will need to guide Tesla to $8.5 trillion in market capitalization, eight times its current value. It will also need to deploy millions of autonomous vehicles and humanoid robots and sustain the company’s hundreds of billions of dollars in profits over the next decade.
The main goals of the compensation plan, divided into 12 tranches, chart a path for Tesla to reach its enormous market value. If he brings the company to this financial height, Musk will be able to earn additional money from 12 percent of the company’s shares. For this, he/she must work in the company for at least 7.5 years. He will also need to help develop a long-term succession plan for the company he has led for more than 20 years.
In addition to the shares guaranteed to him in the 2018 package, the stock options provided by the new compensation plan would leave Musk with 25% of Tesla shares. As of Nov. 5, Tesla shares were trading near a 52-week high at around $450 per share.
Over the course of a decade, Musk will need to deliver 20 million Tesla electric vehicles to buyers, sell 10 million active fully autonomous driving subscriptions, develop and sell 1 million humanoid robots and deploy 1 million robotaxis in commercial service.
Musk will also need to bring the company’s real earnings to $400 billion for four consecutive quarters. Tesla’s real earnings in the third quarter of 2025 were $4.2 billion, down 9% from the previous year.
As of November, Musk’s net worth was $460 billion, the highest in the world. Bloomberg’s Billionaire Index.
Reviving a canceled package
Shareholders also approved a plan to compensate Musk after his 2018 compensation plan was invalidated by a court in Delaware. The payment plan, worth an estimated $56 billion, was challenged by a single shareholder who won the case. Delaware courts rejected Musk’s pay package twice.
After Musk’s 2018 pay package was initially canceled, he moved Tesla’s corporate home from Delaware to Texas. He did the same thing at the headquarters of SpaceX and other companies. In 2024, under Texas law, shareholders once again voted to approve the pay package.
But Delaware’s so-called “court of equity” has once again ruled against one of the largest CEO payouts in modern history. After this negative decision, Musk expressed his dissatisfaction with the state and its management on social media.activist chief judge” is likely fueling a series of corporate exits that Delaware lawmakers are trying to stop with legislation.
“He had a big megaphone,” said Lawrence Hamermesh, professor emeritus at Widener University Delaware School of Law and a former corporate lawyer. “I think there’s more to the movement than just Elon stirring the pot, but I think it has some impact.”
While evaluating whether Musk had undue influence in obtaining the 2018 salary package, Eric TalleyThe Columbia Law School professor noted that the judge acknowledged that other “superstar CEOs” such as Meta’s Mark Zuckerberg and Amazon’s Jeff Bezos were not given such incentive-based contracts.
