Tesla CEO Elon Musk has received shareholder approval for an extraordinary pay package that could potentially be worth nearly $1 trillion (£760 billion), marking one of the most unprecedented executive compensation deals in corporate history. The package was approved by 75% of votes at Tesla’s annual general meeting on Thursday, a decision that was met with enthusiastic applause from attendees.
The deal ties Musk’s compensation directly to the company’s future performance over the next decade, requiring him to significantly increase Tesla’s market value and achieve various ambitious milestones to unlock hundreds of millions of new shares. Musk, who is already the richest person in the world, now faces the challenge of driving Tesla to even greater heights in the coming years to realize the full benefits of the arrangement.
According to Tesla’s board, the scale of the pay package is justified by Musk’s critical role in the company’s success. Board members warned that without such an incentive, there was a risk Musk could leave the company, which they argued Tesla could not afford. The company’s leadership framed the package as essential to maintaining the visionary at the helm of Tesla’s future growth.
Following the vote, Musk took to the stage at the event held in Austin, Texas, where he was greeted with chants of his name and visibly energized the crowd. Musk described the upcoming period as not just a new chapter for Tesla but an entirely new book, signaling his commitment to ambitious innovation and expansion. “What we’re about to embark upon is not merely a new chapter of the future of Tesla, but a whole new book,” he said. He also remarked on the vibrancy of Tesla’s shareholder meetings, contrasting them with the typically dull gatherings of other companies.
The ambitious targets set forth in the pay package include increasing Tesla’s market capitalization from about $1.4 trillion at the time of the meeting to an astonishing $8.5 trillion within 10 years. Additionally, Musk must roll out a fleet of one million self-driving Robotaxi vehicles operating commercially — a target that underscores Tesla’s push into autonomous driving technology.
However, Musk’s early comments at the meeting shifted the spotlight somewhat from Tesla’s electric vehicle business to the company’s Optimus robot project, a development that surprised some analysts and longtime observers. Many had hoped Musk would emphasize a renewed focus on the core electric vehicle segment, particularly after recent challenges in the market.
Gene Munster, managing partner at Deepwater Asset Management and a respected tech analyst, commented on social media platform X about Musk’s focus during the meeting: “Let it sink in where Musk’s head is at. His vision of the ‘new book’ starts with Optimus. No mention of cars, FSD and Robotaxi yet.” This observation highlights a potential shift in Musk’s priorities toward robotics and artificial intelligence over Tesla’s traditional car business.
Later during the event, Musk did touch on Tesla’s Full Self-Driving (FSD) software, stating the company was “almost comfortable” allowing drivers to “text and drive essentially,” a remark that underscores Tesla’s confidence in its autonomous driving technology despite ongoing safety controversies. The FSD system is currently under investigation by U.S. regulators following multiple incidents in which Tesla vehicles reportedly ran red lights or drove on the wrong side of the road, some resulting in crashes and injuries.
Despite these regulatory concerns, Tesla’s shares have performed strongly, rising more than 62% in the past six months, with a slight uptick following the announcement. However, Tesla’s sales have experienced some decline over the past year, coinciding with Musk’s political alignment with former President Donald Trump, a relationship that has since deteriorated.
Dan Ives, a tech analyst at Wedbush Securities and a long-time supporter of Musk’s leadership, praised the CEO in a note following the vote, calling him “Tesla’s biggest asset.” Ives expressed optimism about the potential for artificial intelligence to unlock significant valuation gains for Tesla, predicting that the company’s AI-driven value would become increasingly apparent over the next six to nine months.
Musk already owned approximately 13% of Tesla’s shares prior to the approval of this new compensation deal. Shareholders had previously ratified a pay package worth tens of billions of dollars, contingent on Musk achieving a tenfold increase in Tesla’s market value — a milestone he successfully reached. However, that earlier pay package was struck down by a Delaware judge, who ruled that Tesla’s board members had been too close to Musk, raising concerns over conflicts of interest.
In response to the court ruling,