Tesla shareholders have endorsed a highly ambitious stock compensation plan that could potentially elevate CEO Elon Musk to the world’s first trillionaire. The plan, approved by over 75% of voters at the company’s annual meeting Thursday, outlines performance targets over the next decade that, if met, would award Musk shares worth an estimated $1 trillion (€865 billion).
The Controversial Compensation Plan
The approval arrives amid declining sales for Tesla and continued criticism of the plan’s unprecedented scale of executive pay. While supporters argue the package incentivizes Musk to transform Tesla into an AI powerhouse, critics contend the board remains overly reliant on Musk, whose behavior has lately been a concern for investors.
“He has hundreds of billions of dollars already in the company, and to say that he won’t stay without a trillion is ridiculous,” remarked Sam Abuelsamid, an analyst at Telemetry, highlighting the seeming absurdity of rewarding such a figure.
The Road to a Trillion: Key Milestones
Achieving this trillion-dollar valuation will require substantial performance leaps. Here’s a breakdown of some critical goals Musk must reach:
- Tesla’s Market Value: The plan aims to increase Tesla’s market value almost sixfold.
- Electric Vehicle Delivery: Musk is tasked with delivering 20 million Tesla electric vehicles over the next decade – more than double the number sold since the company’s founding.
- Robot Deployment: Musk has committed to deploying 1 million human-like robots – his “robot army” – currently nonexistent, into homes and workplaces.
Musk’s Perspective and Control
After the vote, Musk stated, “Fantastic group of shareholders,” and urged them to “Hang on to your Tesla stock.” He framed the vote not primarily about financial gain, but about gaining greater control over the company by doubling his stake to nearly 30%. Musk expressed concerns about trusting anyone else to control Tesla’s potentially powerful “robot army,” citing possible dangers to humanity.
Opposition and Broader Voting Results
Major institutional investors, including CalPERS and Norway’s sovereign wealth fund, opposed the plan. Corporate watchdogs like Institutional Shareholder Services and Glass Lewis also recommended rejection, prompting Musk’s sharp criticisms at a recent investor meeting.
Beyond the compensation plan, shareholders also approved Tesla’s investment in Musk’s xAI venture and rejected a proposal to lower the threshold for shareholder lawsuits.
Market Reaction and Future Outlook
Tesla shares experienced a brief uptick in after-hours trading following the vote but ultimately remained virtually unchanged at $445.44 (€385.4). The approval underscores investor confidence in Musk’s vision, despite short-term challenges, and suggests a willingness to support ambitious goals even if they involve considerable risk.
The compensation plan awards new shares contingent on meeting board-established milestones, making the trillion-dollar valuation theoretical rather than guaranteed.
The approval of Musk’s expansive pay package signifies a high-stakes gamble on Tesla’s future and Musk’s ability to navigate a rapidly evolving landscape of electric vehicles, artificial intelligence, and robotics.
