Elon Musk, the CEO of Tesla, has won a landmark shareholder vote granting him a pay package potentially worth $1 trillion in Tesla stock over the next decade. With this plan, Musk may be on his way to becoming the first trillionaire worldwide.
This unprecedented compensation plan, approved by roughly 75 per cent of voting shareholders at Tesla’s annual meeting in Austin, Texas, ties Musk’s earnings directly to ambitious performance milestones aimed at significantly increasing Tesla’s market value and advancing its strategic vision.
The package marks a historic opportunity for Musk to become the world’s first trillionaire, contingent upon achieving targets including increasing Tesla’s market capitalisation nearly sixfold from its current valuation of approximately $1.4 trillion as of late 2025.
The board’s plan ties stages of stock awards to key benchmarks, including revenue growth, profitability, and expansion into artificial intelligence and robotics markets.
Despite Tesla experiencing recent challenges such as declining vehicle sales in key markets like Germany (where sales fell by 50 per cent), shrinking profit margins, and reputational issues linked to Musk’s controversial statements and political involvements, a majority of shareholders remain confident in his leadership.
Many view Musk as a visionary entrepreneur who revitalised Tesla from the brink of bankruptcy to one of the world’s most valuable automakers.
The pay deal has faced opposition from some institutional investors, including major public pension funds such as CalPERS in California, who argue that the compensation is unearned or overly generous.
Nonetheless, the board and shareholders noted that Musk will only unlock this payout by fulfilling demanding targets that demonstrate sustained growth and innovation.
Analysts note that Tesla’s future success hinges on Musk’s ability to execute cutting-edge projects, including deploying autonomous ride-hailing services with robotaxis across the US and commercialising advanced humanoid robots.
This high-stakes gamble underscores Tesla’s ambitions to lead not only in electric vehicles but also on broader technological frontiers.
Tesla stock reacted positively post-vote, rising over three per cent in after-hours trading as investors reflect on the long-term growth prospects enabled by Musk’s incentivised leadership.
The compensation package was initially challenged by retail shareholders who argued that the board was beholden to Musk and that the process used to approve the grant was flawed.
This challenge culminated in a landmark ruling in January 2024 by Delaware Chancery Court Judge Kathaleen McCormick.
The judge ruled that the entire pay package was void, finding that Musk had dominated the compensation process and that the board, despite having legally independent members, was effectively “beholden” to him.
Judge McCormick concluded that the directors failed to adequately scrutinise the deal, resulting in an unjustifiable windfall for the CEO.
