Tesla shareholders have approved a groundbreaking compensation deal for Elon Musk worth up to $1 trillion. The decision, backed by 75% of voters at Thursday’s annual meeting, was met with thunderous applause and celebration.
Musk, the world’s wealthiest man, must dramatically raise Tesla’s market value over the next decade to claim the full payout. If he meets every target, he will receive hundreds of millions of new Tesla shares.
Critics have called the deal excessive, but Tesla’s board defended it, warning that the company could not afford to lose Musk’s leadership.
Musk celebrates in Texas with confidence and energy
After the vote, Musk appeared on stage in Austin, Texas, dancing to chants of his name. “We’re not just writing a new chapter for Tesla,” he told the crowd. “We’re creating a whole new book.”
He added, “Other shareholder meetings are dull. Ours are incredible. Look at this excitement!”
To unlock the entire package, Musk must increase Tesla’s market capitalization from $1.4 trillion to $8.5 trillion and introduce one million fully self-driving Robotaxi vehicles into commercial operation.
Focus turns from cars to humanoid robots
Instead of focusing on electric vehicles, Musk placed the spotlight on Tesla’s humanoid robot, Optimus. The shift in attention surprised analysts who had hoped for updates on Tesla’s car production and software development.
“Let it sink in where Musk’s focus lies,” 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 touch on Tesla’s full self-driving software, saying the company was “almost comfortable” allowing drivers to “text and drive essentially.”
Safety issues continue to attract scrutiny
US regulators are investigating Tesla’s self-driving feature after reports of cars running red lights and driving on the wrong side of the road. Several of these incidents led to accidents and injuries.
Despite ongoing investigations, Tesla’s stock rose slightly in after-hours trading and has climbed more than 60% in the past six months.
Political ties and image problems weigh on Musk
Tesla’s sales have fallen over the past year following Musk’s public support for former US President Donald Trump. Their relationship later soured, intensifying political backlash against Musk.
Investor Ross Gerber, CEO of Gerber Kawasaki, called Musk’s pay package “another unbelievable moment in corporate history.” He said Tesla faces major challenges despite Musk’s ambitious goals.
Gerber questioned the real market for humanoid robots and highlighted competition from robotaxi rivals like Waymo.
He added that his firm reduced its Tesla holdings, saying, “Musk’s polarising persona has hurt the brand. Elon seems unaware of how unpopular he has become with the public.”
Analysts defend Musk’s leadership
Dan Ives, a senior technology analyst at Wedbush Securities, described Musk as “Tesla’s greatest strength.” In a note after the vote, he said, “Tesla’s AI value is now being unlocked. The next growth phase has started.”
Musk already holds around 13% of Tesla’s shares. Shareholders had previously supported a multibillion-dollar compensation deal tied to a tenfold increase in company value—a target Musk met.
Legal setbacks and Tesla’s move to Texas
A Delaware judge struck down that earlier pay deal, saying Tesla’s board was too closely connected to Musk. The company later reincorporated in Texas, and the Delaware Supreme Court is now reviewing the lower court’s decision.
The new pay plan faced opposition from several major institutional investors, including Norway’s sovereign wealth fund and the California Public Employees’ Retirement System, the largest public pension fund in the United States.
With major funds voting against it, Musk relied heavily on Tesla’s large community of retail investors to get the deal approved.
Tesla board campaigns to secure Musk’s deal
Musk and his brother Kimbal, who also sits on Tesla’s board, were both allowed to vote at Thursday’s meeting. Ahead of the event, Tesla’s directors launched an intensive campaign urging investors to approve the plan.
A promotional video on votetesla.com featured board chair Robyn Denholm and director Kathleen Wilson-Thompson praising Musk’s leadership and vision for the company’s future. The campaign drew criticism from governance experts who said it blurred ethical lines between investor outreach and marketing.
