Tesla shareholders have voted to approve a record-breaking pay deal for Elon Musk that could total nearly $1 trillion. The proposal, supported by 75% of voters during Thursday’s annual meeting, triggered loud applause and cheers from the audience.
Musk, the world’s richest person, must dramatically grow Tesla’s market value over the next ten years to unlock the full package. If he reaches all performance goals, he will receive hundreds of millions of new Tesla shares.
While critics have condemned the payout as excessive, Tesla’s board argued that the company cannot afford to lose Musk’s leadership and vision.
Musk celebrates his victory in Texas
After the results were announced, Musk appeared on stage in Austin, Texas, dancing as the crowd chanted his name. “We’re not just opening a new chapter for Tesla,” he said. “We’re writing a whole new book.”
He added with a grin, “Other shareholder meetings are dull. Ours are legendary. Look at this crowd!”
To receive the full value of his package, Musk must increase Tesla’s market capitalization from $1.4 trillion to $8.5 trillion and bring one million self-driving Robotaxi vehicles into operation.
Musk’s focus shifts toward humanoid robots
Musk surprised investors by spotlighting Tesla’s humanoid robot, Optimus, instead of its electric cars. His remarks disappointed some analysts who had hoped for news about the company’s core business.
“Let it sink in where Musk’s priorities are,” 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 briefly discussed Tesla’s full self-driving software, saying the company was “almost comfortable” allowing drivers to “text and drive essentially.”
Safety investigations continue to pressure Tesla
US regulators are still investigating Tesla’s self-driving feature after reports of cars running red lights and driving on the wrong side of the road. Several of those incidents resulted in crashes and injuries.
Despite ongoing scrutiny, Tesla’s stock rose slightly in after-hours trading and has gained more than 60% in the past six months.
Political ties and brand image challenges
Tesla’s sales have slipped over the past year after Musk publicly aligned himself with former US President Donald Trump. Their relationship later collapsed, adding further controversy to Musk’s image.
Investor Ross Gerber, CEO of Gerber Kawasaki, described Musk’s compensation plan as “another unbelievable chapter in corporate history.” He said Tesla still faces tough financial challenges despite Musk’s bold goals.
Gerber questioned whether humanoid robots would attract large-scale demand and pointed to growing competition from robotaxi rivals such as Waymo.
He added that his firm reduced its Tesla investment, citing “Musk’s polarising persona” that has “damaged the company’s brand.” “Elon seems disconnected from how low his public approval has fallen,” he said.
Analysts continue to stand behind Musk
Dan Ives, a technology analyst at Wedbush Securities, called Musk “Tesla’s most valuable asset.” In a note following the vote, he wrote, “Tesla’s AI-driven valuation is now being unlocked. The next growth phase has begun.”
Musk already owns about 13% of Tesla’s shares. Shareholders had previously approved another massive pay plan tied to a tenfold rise in the company’s value, which Musk achieved.
Legal battles and Tesla’s relocation to Texas
A Delaware judge struck down the earlier pay deal, ruling that Tesla’s board was too closely connected to Musk. The company later reincorporated in Texas. The Delaware Supreme Court is now reviewing the lower court’s decision.
The new deal faced resistance from major institutional investors, including Norway’s sovereign wealth fund and the California Public Employees’ Retirement System, the largest public pension fund in the US.
With many large investors opposed, Musk relied on Tesla’s large number of retail shareholders to secure the approval.
Tesla board launches full campaign for Musk’s plan
Musk and his brother Kimbal, who also serves on Tesla’s board, were both allowed to vote at Thursday’s meeting. In the weeks before the vote, Tesla’s directors launched an intensive campaign urging investors to support the proposal.
A promotional video on votetesla.com featured board chair Robyn Denholm and director Kathleen Wilson-Thompson praising Musk’s leadership and long-term vision. The campaign drew criticism from corporate governance experts who said it blurred the line between advocacy and shareholder influence.
