Elon Musk secures record $1 trillion Tesla pay package, largest ever for a CEO
Chief Executive Officer (CEO) Elon Musk, Tesla Inc. achieved a record $1 trillion Tesla pay package after its shareholders approved it on Thursday, November 6; this was the largest payout ever given to a corporate leader. AFP. The voting results were announced at an event held at the company’s Austin factory.
The pay package, designed to secure Musk’s commitment to Tesla as the company advances its work in artificial intelligence and robotics, received over 75 percent support from shareholders, according to a Tesla official at the company’s annual meeting.
The compensation plan also focuses on keeping Musk at Tesla for at least seven and a half years. When the plan is announced in September, Musk’s ownership of Tesla will increase from about 12 percent to possibly more than 25 percent.
Musk said: “I want to thank everyone who supported the shareholder vote from the bottom of my heart. I appreciate it very much.” The report stated that Tesla described its growth potential as almost unlimited and stated that it would “be by far the most valuable company in the world” if it achieved its goals in autonomous driving and artificial intelligence in July.
However, he has also suggested that he may walk away from Tesla or reduce his involvement unless his ownership stake is increased enough to secure the level of control he wants over the company’s management.
While Tesla Chairman Robin Denholm urged shareholders to support the offer, he emphasized that retaining Musk was crucial to the company’s future and warned that shares could fall significantly if he left.
The board rejected criticism that the billionaire’s relationships with divisive political figures were hurting sales.
Tesla shareholders have backed Musk in the past in votes on his compensation, including a 2018 package worth about $55.8 billion that was repeatedly halted by a Delaware court amid shareholder lawsuits.
Following the latest Delaware decision, Denholm and Tesla’s board revisited the issue, first approving an “interim” compensation package worth about $29 billion in August, then implementing a larger plan in September.
Activist group Tesla Takedown protests
However, activist group Tesla Takedown condemned the result, pointing out the company’s recent decline in vehicle sales.
The group opposing the plan in downtown Austin on Wednesday said: “Elon Musk just received a trillion dollars for failure. Sales are down, security risks are up, and his policies are alienating customers. This isn’t leadership, it’s the world’s most expensive engagement reward.”
Meanwhile, Musk, whose net worth exceeds $500 billion, remains the richest individual in the world, according to Forbes’ real-time billionaire rankings. To earn the full compensation package, Tesla must reach 12 market capitalization milestones. The first part will be available when Tesla’s valuation reaches $2 trillion, up from the current $1.5 trillion. The plan also includes various performance targets related to operating profit and product output, including a target to deliver 20 million Tesla vehicles, the report said.
