Enterprise

Musk's Shocking $1T Payday Approved By Shareholders

Krishn patel

Krishn patel

— 2 min read
  • Tesla shareholders have voted to approve CEO Elon Musk's nearly $1 trillion compensation plan, a package previously voided by a Delaware court.
  • The controversial proposal passed with a significant 75% majority, defying recommendations from top proxy advisory firms Glass Lewis and ISS.
  • The pay package is tied to a series of extremely ambitious market capitalization and operational milestones over the next decade.
  • Musk's potential stake in the company could rise to about 25% if all targets are met, solidifying his control.

Shareholders Greenlight Musk's Landmark Pay Package

In a decisive move, Tesla shareholders have voted in favor of CEO Elon Musk’s colossal, nearly $1 trillion compensation plan during the company's annual meeting in Austin, Texas. The proposal secured a commanding 75% of the vote, signaling strong investor confidence in Musk's long-term vision despite significant opposition from influential proxy advisors.

The decision comes after prominent advisory firms Glass Lewis and ISS recommended that shareholders vote against the package, raising concerns about its massive scale and the board's process. However, the result demonstrates that a large portion of Tesla's investor base remains firmly behind its trailblazing CEO.

What's Inside the Trillion-Dollar Plan?

The landmark pay package, first introduced in September, is not a simple salary. Instead, it consists of 12 tranches of stock options that vest only if Tesla achieves a series of demanding milestones over the next ten years. This performance-based structure is designed to tie Musk's compensation directly to the company's success.

The Ambitious Milestones

For Musk to receive the full payout, Tesla's valuation must soar to unprecedented heights. The first tranche vests only when Tesla hits a market capitalization of $2 trillion—up from its current $1.54 trillion. Subsequent tranches are awarded for every additional $500 billion in market value, ultimately requiring the company to reach a staggering $8.5 trillion valuation.

Beyond market cap, the plan includes aggressive operational goals:

  • Achieving 20 million vehicle deliveries.
  • Securing 10 million active Full Self-Driving (FSD) subscriptions.
  • Delivering 1 million Tesla Bots.
  • Operating 1 million robotaxis commercially.

This shareholder vote serves as a re-ratification of a similar plan from 2018. A Delaware Court of Chancery judge voided that original package last year, ruling it was improperly granted by the board. By securing overwhelming shareholder approval this time, Tesla aims to strengthen its legal position as it appeals the court's decision.

Adding another layer to the debate are "covered events" clauses within the agreement. These could potentially allow Musk to earn shares even without meeting operational milestones in cases of natural disasters, wars, or regulatory changes, a point of contention for critics.

As the legal battle continues, this vote sends a clear message that the majority of Tesla's shareholders are willing to bet big on Elon Musk. The outcome could reshape the future of executive compensation and corporate governance for years to come.

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