Tesla shareholders voted Thursday to approve Elon Musk’s staggering new pay package, in a move aimed at retaining the controversial CEO’s leadership during a time of great upheaval for the automaker. Over 75 percent of shares voted in favor of the proposal.
The vote gives Musk enormous sway over his electric vehicle company, as well as awards him with the largest corporate payout in history. The final tally is expected to be disclosed in a Securities and Exchange Commission filing in a few days.
Musk took the stage at the shareholder meeting in Austin to chants of “Elon! Elon!” and flanked by dancing Optimus robots. “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.
The proposed pay package, which was put forward by the board last September, would award Musk more than 423 million additional shares, increasing his stake to about 25 percent from its current level of 15 percent. In order to receive the full compensation, Musk would need to achieve a series of milestones, including raising Tesla’s market capitalization from its current $1.5 trillion to $8.5 trillion in 10 years. Musk must also put into service 1 million robotaxis and sell 12 million more cars, 10 million Full Self-Driving subscriptions, and 1 million humanoid robots.
Musk would need to achieve a series of milestones, including raising Tesla’s market capitalization from its current $1.5 trillion to $8.5 trillion in 10 years.
The vote was opposed by some of Tesla’s largest shareholders, including Norges Bank Investment Management, which manages Norway’s sovereign wealth fund, as well as some smaller public pension funds, such as the American Federation of Teachers and various New York City retirement systems. Major proxy advisory firms Institutional Shareholder Services and Glass Lewis have also come out against the pay proposal.
Musk’s current compensation package, valued at more than $50 billion, was invalidated by a Delaware court last year after a judge found that Tesla’s board lacked sufficient independence from the billionaire CEO. Shareholders had voted twice to approve the hefty compensation, but the judge still upheld her ruling blocking it. Tesla has appealed the decision to the Delaware Supreme Court. The ruling spurred Musk to engineer a proposal to move Tesla’s legal home from Delaware to Texas, which shareholders also approved.
The new award comes as the board continues to push the message that Tesla is on the cusp of becoming a leader in AI and robotics, requiring Musk’s steady hand on the helm. In reality, Tesla’s position is shakier than ever. Musk’s support for President Donald Trump and his work at the Department of Government Efficiency to fire tens of thousands of federal workers and cancel humanitarian aid programs spawned a nationwide protest movement and a steep drop in sales. The expiration of the federal EV tax credit is expected to lead to an even further drop in sales.
Whether Musk can achieve these audacious goals set out in the pay package seems increasingly at odds with his approach to the technology. Tesla rolled out its first robotaxi service in Austin, Texas, earlier this year — although the service fell short of Musk’s earlier predictions. The cars still all feature safety monitors, either in the driver or passenger seat — though Musk has said they could be removed by the end of the year. The company’s only new product since 2020, the Cybertruck, has widely been considered a consumer flop. And competition from other automakers, especially those in China, has been shrinking Tesla’s market share and sapping its resources.