Tesla shareholders have approved a groundbreaking pay deal for Elon Musk that could reach nearly $1 trillion. The decision, supported by 75% of votes at Thursday’s annual meeting, sparked loud applause and celebration.
Musk, already the world’s richest person, must dramatically expand Tesla’s market value over the next decade to unlock the full payout. If he meets all performance goals, he will receive hundreds of millions of new Tesla shares.
The massive package has faced criticism, but Tesla’s board defended it, saying the company cannot afford to lose Musk’s leadership.
A show of triumph in Austin
After the vote, Musk appeared on stage in Austin, Texas, dancing to chants of his name. “We’re not just turning a page in Tesla’s story; we’re writing a whole new book,” he told the crowd with a smile.
He added, “Other shareholder meetings are boring. Ours are wild. Look at this atmosphere.”
To earn his full reward, Musk must raise Tesla’s market value from $1.4 trillion to $8.5 trillion and put one million fully self-driving Robotaxi vehicles into commercial use.
Optimus robot steals the spotlight
At the meeting, Musk shifted focus to Tesla’s humanoid robot, Optimus, rather than its electric vehicles. The move surprised many analysts and long-time investors.
“Let it sink in where Musk’s focus is,” wrote Gene Munster, managing partner at Deepwater Asset Management, on X. “His new vision starts with Optimus. Still no mention of cars, self-driving, or robotaxis.”
Later, Musk did mention Tesla’s full self-driving software, saying the company was “almost comfortable” allowing drivers to “text and drive essentially.”
Safety questions over Tesla’s self-driving tech
US regulators continue to investigate Tesla’s self-driving system after multiple reports of vehicles running red lights or driving on the wrong side of the road. Some incidents led to crashes and injuries.
Despite these concerns, Tesla shares rose slightly in after-hours trading and have jumped more than 60% in the past six months.
Political ties and investor unease
Tesla’s sales have weakened over the past year following Musk’s public alliance with former US President Donald Trump. Their relationship ended earlier this year, creating further controversy for the company.
Investor Ross Gerber, chief executive of Gerber Kawasaki, described Musk’s new deal as “another unbelievable chapter in business.” He warned that Tesla still faces major financial and image challenges.
Gerber questioned whether there is real demand for humanoid robots and pointed to rising competition in the robotaxi sector from firms like Waymo.
He added that his company reduced its Tesla stake because “Musk’s polarising persona” has “damaged the brand’s reputation.” “Elon seems disconnected from the reality that his popularity has dropped sharply,” Gerber said.
Analysts stand by Musk’s leadership
Dan Ives, senior analyst at Wedbush Securities, called Musk “Tesla’s biggest asset.” In a research note, he wrote, “The AI-driven value of Tesla is beginning to unfold. The next growth phase has started.”
Musk already holds about 13% of Tesla shares. Shareholders had previously approved a multibillion-dollar pay plan tied to a tenfold rise in Tesla’s market value—a target Musk successfully achieved.
Legal challenges and Tesla’s relocation
A Delaware judge struck down that earlier pay package, ruling that Tesla’s board was too closely tied to Musk. Tesla then moved its legal headquarters from Delaware to Texas. The Delaware Supreme Court is now reviewing the case.
The new deal faced opposition from major institutional investors, including Norway’s sovereign wealth fund and the California Public Employees’ Retirement System, the largest US public pension fund.
Because of their resistance, Musk depended on Tesla’s large community of retail investors to secure the vote.
Tesla board campaigns for Musk’s new plan
Musk and his brother Kimbal, who serves on Tesla’s board, were both allowed to vote at Thursday’s meeting. In the weeks before the event, Tesla’s directors launched an energetic campaign to rally shareholder support.
A promotional video on votetesla.com featured board chair Robyn Denholm and director Kathleen Wilson-Thompson praising Musk’s leadership and vision for Tesla’s future. The campaign drew criticism from governance experts who said it blurred the line between marketing and shareholder influence.
