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Tesla shareholders approved a $1tn compensation plan for CEO Elon Musk on Thursday, awarding the world\u2019s richest person what would be the largest corporate payout in history if he meets the goals necessary to receive it.<\/p>\n
The pay package, which several high-profile investors opposed, demonstrates that shareholders still believe Musk can lead the automaker in an era dominated by robotics and artificial intelligence.<\/p>\n
The result 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. Chants of \u201cElon\u201d erupted in the room at the news of its approval.<\/p>\n
\u201cThanks, guys,\u201d Musk said, after briefly dancing on stage alongside the company\u2019s Optimus robots.<\/p>\n
Musk described the Optimus robots, which have not gone into mass production, as the future of the company and of humanity. He reiterated a claim that it would be \u201cthe biggest product of all time\u201d, and suggested they could be used in everything from healthcare to prisons.<\/p>\n
\u201cYou now get a free Optimus and it\u2019s just going to follow you around and stop you from doing crime,\u201d Musk said. \u201cYou don\u2019t have to put people in prisons and stuff. It\u2019s really wild to think of the possibilities.\u201d<\/p>\n
Musk had previously said he wanted the pay package for more control over the company and exert \u201cstrong influence over this robot army\u201d that he vowed to build as the company branches into robotics.<\/p>\n
Musk\u2019s staggering compensation is comparative with the GDP of entire countries, exceeding that of Ireland, Sweden and Argentina. It vastly exceeds federal funding for entire government programs such as annual cost of Snap food benefits and dwarfs that of other tech moguls such as Mark Zuckerberg.<\/p>\n
Critics of the package, including some investors, argued that awarding Musk concentrated power in one erratic leader and ignored the challenges the company has faced.<\/p>\n
\u201cElon Musk just got $1tn for failure. Sales are down, safety risks are up, and his politics are driving customers away. This isn\u2019t leadership \u2013 it\u2019s the world\u2019s most expensive participation trophy,\u201d the protest group Tesla Takedown said in a statement.<\/p>\n
If Musk delivers on the lofty milestones in the pay package laid out at the annual meeting, he could become the world\u2019s first trillionaire. To do so, he would need to guide Tesla to $8.5tn in market capitalization, eight times what it\u2019s worth today. He would also be required to deploy millions of autonomous vehicles and humanoid robots, and sustain the company\u2019s bottom line in the hundreds of billions over the next decade.<\/p>\n
The major goals of the compensation plan, split into 12 tranches, lay out a path for Tesla to reach that enormous market capitalization. If he brings the company to that financial height, Musk would be able to cash in on an additional 12% of the company\u2019s stocks. To do so, he has to be vested in the company for at least seven and a half years. He would also have to help develop a long-term succession plan for the company he has led for more than 20 years.<\/p>\n
The stock options provided by the new compensation plan, on top of shares guaranteed to him in his 2018 package, would leave Musk with 25% ownership of Tesla\u2019s stock. As of 5 November, Tesla stock was trading close to its 52-week high, at about $450 per share.<\/p>\n
Over the course of a decade, Musk is required to deliver 20m of Tesla\u2019s electric vehicles to buyers, sell 10m active full self-driving subscriptions, develop and sell 1m humanoid robots and deploy 1m robotaxis in commercial service.<\/p>\n
Musk will also be required to bring the company to $400bn in actual earnings for four consecutive quarters. Tesla\u2019s actual earnings for the third quarter of 2025 were $4.2bn, down 9% from the year prior.<\/p>\n
As of November, Musk\u2019s net worth was $460bn, the highest in the world, according to Bloomberg\u2019s Billionaire Index.<\/p>\n
Shareholders also approved a plan that would compensate Musk after his 2018 compensation plan was invalidated by a court in Delaware. The pay plan, worth an estimated $56bn, was challenged by a single stockholder, who won his case. The Delaware court of chancery rejected Musk\u2019s pay package twice.<\/p>\n
After Musk\u2019s 2018 pay package was first rescinded, he moved Tesla\u2019s corporate home from Delaware to Texas. He followed suit with SpaceX and other companies\u2019 headquarters. In 2024, under Texas law, shareholders once again voted to approve the pay package.<\/p>\n