Tesla shareholders voted overwhelmingly to approve a pay package for CEO Elon Musk that could ultimately be worth as much as $1 trillion – potentially the largest executive pay “award” in human history.
Earlier this year, Musk explained to the public that the pay package wasn’t as much about making big bucks as it was about him retaining control over Tesla.
“It’s not about ‘compensation’, but about me having enough influence over Tesla to ensure safety if we build millions of robots. If I can just get kicked out in the future by activist shareholder advisory firms who don’t even own Tesla shares themselves, I’m not comfortable with that future,” Musk wrote on September 23.
About 75% of voters supported the trillion-dollar pay plan during Tesla’s annual meeting in Austin this week, demonstrating strong confidence in Musk’s leadership as the company continues to focus on advancing artificial intelligence, robotics, and autonomous driving technology.
The vote follows months of campaigning by Tesla’s board and legal challenges surrounding Musk’s past potential compensation agreements. Tesla board chair Robyn Denholm previously told investors the package was critical to keeping Musk focused on the company’s long-term technology goals, as previously reported by DX.
According to a recent SEC filing, the plan awards Musk the opportunity to earn up to 423 million shares of the company if Tesla reaches an evaluation of $8.5 trillion by 2035. The pay structure for Musk ties payouts to a collection of performance “milestones“ including the goal of producing 20 million vehicles per year, another of deploying 1 million autonomous robotaxis, as well as a goal to deliver 1 million Optimus humanoid robots to consumers.
For every $500 billion increase in Tesla’s market value, Musk would reportedly earn an additional 1% of the company’s equity. If all targets are met, Musk’s ownership could climb from about 13% to nearly 29%.
In August, the board advanced a separate, interim plan worth roughly $29 billion, granting 96 million restricted stock units to keep Musk with the company through 2030. That move came after multiple Delaware court decisions nullified Musk’s original 2018 compensation package, valued at $56 billion at the time, despite shareholders having amended it to meet legal standards twice.
The new vote could have significant implications for Texas, where Tesla relocated its headquarters in 2021 and continues to expand its presence. The Gigafactory in Austin anchors a growing cluster of Musk-led business ventures, which includes a heavy focus on autonomous driving projects, such as their Robotaxi program.
Despite approval of the pay package this week, Tesla stock dipped slightly in after-hours trading Thursday, per Nasdaq.
Under the terms of the plan, Musk will not receive any salary or equity unless Tesla reaches the outlined milestones. If the company succeeds, Musk could become the first CEO in history to achieve a trillion-dollar compensation, and Tesla could redefine the future of corporate incentive structures.
Shareholders, for now, have overwhelmingly committed to Musk’s vision.