Elon Musk has secured shareholder approval for a record-breaking $1 trillion pay package, tied to Tesla’s ambitious long-term growth targets, including breakthroughs in AI, robotics, and autonomous vehicles.
At Tesla’s annual general meeting in Austin, Texas, 75% of shareholders voted in favor of the unprecedented stock-based compensation plan. Musk, already the world’s richest person, must now meet a series of high-stakes performance milestones to unlock the full value.
After the vote, Musk took to the stage amid applause, dancing and declaring,
“What we’re about to embark upon is not merely a new chapter of the future of Tesla, but a whole new book.”
What Musk Has to Achieve
The new pay deal is performance-based, meaning Musk won’t receive a salary but will be awarded over 400 million Tesla shares—worth around $1 trillion—if the following goals are met over 10 years:
- Deliver 20 million electric vehicles
- Deploy 1 million self-driving Robotaxis
- Acquire 10 million Full Self-Driving (FSD) subscriptions
- Manufacture 1 million Optimus humanoid robots
- Achieve $400 billion in core profit
- Increase Tesla’s market value from $1.4 trillion to $8.5 trillion
Focus on AI and Robotics
In his speech, Musk prioritized Tesla’s AI-powered humanoid robot, Optimus, calling it central to the company’s future. Unveiled as a prototype in 2022, Optimus is designed to perform repetitive or dangerous tasks in factories and homes.
“Let it sink in where Musk’s head is at,” wrote analyst Gene Munster. “His vision of the ‘new book’ starts with Optimus.”
While some investors hoped for more focus on electric vehicles and FSD, Musk’s emphasis on robotics and AI signals Tesla’s pivot toward an AI-first strategy.
Mixed Reactions from Investors and Analysts
Not all shareholders were on board. Major institutional investors—including Norway’s sovereign wealth fund and CalPERS, the largest U.S. public pension—voted against the deal, citing corporate governance concerns and Musk’s increasing voting power.
However, Tesla’s large base of retail investors ultimately swung the vote in Musk’s favor. Critics warn that the package grants Musk even more influence over the company without limiting his activities outside of Tesla.
“Elon Musk, whether you like him or not, is a visionary,” said Kathryn Hannon of RBC Brewin Dolphin. “But aligning him with shareholders requires proper governance and incentives.”
Ongoing Controversy and Legal Challenges
The deal is not without controversy. A similar pay package was previously invalidated by a Delaware court due to board members’ close ties to Musk. Tesla has since reincorporated in Texas, and the case is currently under review by the Delaware Supreme Court.
Tesla board members have actively campaigned to push the deal forward, including via promotional videos and direct appeals to shareholders—a move some governance experts criticized as excessive.
Brand Risks and Political Baggage
Tesla faces other headwinds beyond its pay structure. Sales have slowed since Musk’s alignment with former U.S. President Donald Trump, and investor confidence has been rattled by Musk’s controversial public persona.
“His divisive views have demolished the value of the brand,” said Ross Gerber, a long-time Tesla investor who recently cut his firm’s stake.
Despite these issues, Tesla shares are up over 60% in the last six months, and some analysts believe the AI-powered future Musk envisions is beginning to resonate with the market.
“We believe the march to an AI-driven valuation for Tesla has now begun,” said Dan Ives of Wedbush Securities.
