Tesla investors have voted to approve a historic pay package for Elon Musk that could total nearly $1 trillion. The plan, supported by 75% of votes at Thursday’s annual meeting, was met with loud cheers and applause.
Musk, already the world’s richest individual, must substantially increase Tesla’s market value over the next ten years to receive the full payout. If he meets all performance milestones, he will earn hundreds of millions of new Tesla shares.
Critics have called the deal excessive, but Tesla’s board said the company cannot risk losing Musk’s leadership and vision.
Musk celebrates his win in Austin
After the vote, Musk appeared on stage in Austin, Texas, dancing as the crowd chanted his name. “We’re not just opening a new chapter for Tesla; we’re writing an entirely new book,” he said.
He added, “Other shareholder meetings are dull. Ours are incredible. Look at this energy!”
To claim the full payout, Musk must lift Tesla’s market capitalization from $1.4 trillion to $8.5 trillion and launch one million self-driving Robotaxi vehicles into commercial operation.
Optimus robot becomes center of attention
Musk shifted focus from Tesla’s electric cars to the company’s humanoid robot, Optimus, surprising analysts who expected updates on vehicle production.
“Let it sink in where Musk’s priorities lie,” wrote Gene Munster, managing partner at Deepwater Asset Management, on X. “His vision starts with Optimus. Still no mention of cars, self-driving, or robotaxis.”
Later, Musk addressed Tesla’s full self-driving software, saying the company was “almost comfortable” allowing drivers to “text and drive essentially.”
Regulators scrutinize self-driving technology
US authorities continue to investigate Tesla’s self-driving feature after incidents of vehicles running red lights or driving on the wrong side of the road. Some cases resulted in crashes and injuries.
Despite regulatory attention, Tesla shares rose slightly in after-hours trading and have gained more than 60% over the past six months.
Political ties and public perception create challenges
Tesla’s sales have fallen over the past year after Musk publicly aligned with former US President Donald Trump. Their later falling-out added more scrutiny to Musk’s public image.
Investor Ross Gerber, CEO of Gerber Kawasaki, called Musk’s pay package “another unbelievable chapter in corporate history.” He said Tesla faces financial and reputational challenges despite Musk’s ambitious goals.
Gerber questioned demand for humanoid robots and noted competition from robotaxi developers such as Waymo.
He added that his firm reduced Tesla holdings because “Musk’s polarising image has hurt the brand. Elon seems unaware of how unpopular he has become.”
Analysts maintain support for Musk
Dan Ives, senior analyst at Wedbush Securities, called Musk “Tesla’s most valuable asset.” In a note after the vote, he wrote, “Tesla’s AI-driven value is beginning to unlock. The next phase of growth has started.”
Musk already owns about 13% of Tesla shares. Shareholders had previously approved another multibillion-dollar pay plan tied to a tenfold increase in company value—a target Musk achieved.
Legal disputes and Texas relocation
A Delaware judge struck down the earlier pay plan, ruling Tesla’s board was too closely connected to Musk. Tesla later moved its corporate registration to Texas. The Delaware Supreme Court is reviewing the lower court’s decision.
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.
With these funds voting against the package, Musk relied heavily on Tesla’s large retail investor base to secure approval.
Tesla board launches promotional campaign
Musk and his brother Kimbal, a board member, were both allowed to vote at Thursday’s meeting. In the weeks before the vote, Tesla directors ran an extensive campaign encouraging shareholders to back the plan.
A video on votetesla.com featured board chair Robyn Denholm and director Kathleen Wilson-Thompson praising Musk’s leadership and long-term vision. Governance experts criticized the campaign for blurring the line between shareholder communication and marketing.
