Elon Musk’s Compensation Plan Approved by Shareholders
Elon Musk, the chief executive officer of Tesla, has received shareholder approval for a compensation plan that could potentially award him up to $1 trillion in stock rewards if he meets specific corporate objectives. The proposal was passed during Tesla’s annual shareholder meeting, which took place at the company’s Austin, Texas headquarters on the 6th. The event was live-streamed online, and Tesla confirmed that over 75% of shareholders voted in favor of the CEO compensation plan.
Musk expressed his gratitude to the shareholders, calling them “fantastic” and encouraging them to “hold onto their Tesla shares tightly.” His participation in the vote marked a significant shift, as Delaware state law previously prevented him from voting on executive compensation due to Tesla’s corporate registration there. However, after the company relocated to Texas last year, new state regulations allowed Musk to vote proportionally to his holdings, which are estimated to be between 13–15% of Tesla’s shares.
The 12-Step Plan for Musk’s Rewards
The compensation plan, designed by Tesla’s board, outlines a 12-step process through 2035 to grant Musk approximately 423 million shares—equivalent to 12% of Tesla’s total common stock—if he achieves predetermined milestones. These include raising Tesla’s market capitalization from its current $1.5 trillion to $2 trillion, then to $8.5 trillion. Additionally, Musk must deliver 20 million vehicles, more than double the total delivered since the company’s founding. Other targets involve securing 10 million FSD (Full Self-Driving) software subscriptions, deploying 1 million humanoid robots, operating 1 million robotaxis commercially, and achieving $400 billion in pre-tax earnings (EBITDA).
Despite the plan’s approval, it faced opposition from major funds, including Norway’s Government Pension Fund Global, one of Tesla’s top 10 shareholders. While acknowledging Musk’s contributions, the fund raised concerns about the “unprecedented scale” of the compensation. Institutional Shareholder Services (ISS), the world’s largest proxy advisory firm, also recommended voting against the proposal last month.
Board Warnings and Musk’s Concerns
In a public letter to shareholders late last month, Tesla’s board warned that Musk might leave the company if the plan failed. During a conference call on the 22nd of last month, Musk indirectly addressed potential loss of control, referencing Tesla’s humanoid robot “Optimus”: “If we create this robot army, will I have strong influence over it? I’d feel uncomfortable creating such a robot army if I don’t have strong influence.”
Analysts estimate that Musk could gain tens of billions more in wealth if partial milestones are met, potentially surpassing John D. Rockefeller as the wealthiest figure in U.S. history. According to Guinness World Records, Rockefeller’s peak wealth in the early 20th century equates to approximately $630 billion today. Forbes currently values Musk’s net worth at $493 billion.
Stock Performance After the Vote
Tesla’s stock, which closed at $445.91 on the New York Stock Exchange—down 3.50% from the previous day—rose over 2% in after-hours trading following the shareholder vote. This indicates a positive reception from investors despite the controversy surrounding the compensation plan. The decision reflects a continued confidence in Musk’s leadership and the long-term vision of Tesla.