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Tesla Shareholders Approve Musk’s Trillion-Dollar Pay Package Amid Company Challenges
The world’s richest man, Elon Musk, has secured a path to potentially become history’s first trillionaire after Tesla shareholders overwhelmingly approved his compensation package on Thursday. More than 75% of voters backed the plan during the company’s annual meeting in Austin, Texas, despite weeks of heated debate over whether anyone deserved such unprecedented pay.
“Fantastic group of shareholders,” Musk declared after the final tally, encouraging investors to “hang on to your Tesla stock.”
The approved package could grant Musk stock worth $1 trillion if he meets specific performance targets over the next decade. This vote of confidence comes at a crucial time for Tesla, which has faced significant challenges recently, including plummeting sales, market share, and profits—issues some analysts attribute directly to Musk’s increasingly divisive public persona.
Just three days before the vote, European market reports revealed another month of declining Tesla sales, including a staggering 50% collapse in Germany, one of the company’s key European markets. Critics point to Musk’s political statements and promotion of conspiracy theories as factors driving away potential customers.
Despite these challenges, many Tesla investors still view Musk as a visionary capable of extraordinary business achievements, including his previous success in rescuing Tesla from near-bankruptcy several years ago and transforming it into one of the world’s most valuable companies.
The path to trillionaire status won’t be easy. Tesla’s board has established ambitious targets that Musk must hit, including increasing the company’s market value to nearly six times its current level. He must also deliver 20 million electric vehicles over the next decade—more than doubling Tesla’s total production since its founding—while facing increasingly fierce competition in the EV market.
Additionally, Musk must deploy one million of his human-like robots, which he describes as a “robot army” designed to transform work and home environments. Currently, none of these robots have been commercially deployed.
The compensation plan includes intermediate milestones that would grant Musk newly created stock as he approaches these ultimate goals. If successful, this could help him eventually surpass John D. Rockefeller, considered America’s all-time richest individual. According to Guinness World Records, Rockefeller’s peak wealth was equivalent to about $630 billion in current dollars. Forbes estimates Musk’s current wealth at $493 billion.
Musk’s victory came despite opposition from several major institutional investors, including CalPERS (the largest U.S. public pension fund) and Norway’s sovereign wealth fund. Corporate watchdogs Institutional Shareholder Services and Glass Lewis also criticized the package, prompting Musk to label them “corporate terrorists” during a recent investor meeting.
“He has hundreds of billions of dollars already in the company and to say that he won’t stay without a trillion is ridiculous,” said Sam Abuelsamid, an analyst at research firm Telemetry who has been covering Tesla for nearly two decades. “It’s absurd that shareholders think he is worth this much.”
Supporters argued that the compensation package is necessary to keep Musk focused on Tesla as he works to transform it into an AI powerhouse, developing software for self-driving cars and robots for homes and businesses.
“This AI chapter needs one person to lead it and that’s Musk,” said financial analyst Dan Ives of Wedbush Securities. “It’s a huge win for shareholders.”
Many investors likely considered Musk’s not-so-subtle threat to abandon the company if the package wasn’t approved—a move that could potentially devastate Tesla’s stock price.
Tesla shares, which have already risen 80% over the past year, initially climbed on news of the vote in after-hours trading but eventually settled unchanged at $445.44.
According to Musk, the compensation isn’t primarily about money but about increasing his stake in Tesla to nearly 30%, giving him greater control over the company’s future. He specifically mentioned concerns about Tesla’s planned “robot army,” suggesting he didn’t trust anyone else to manage such potentially powerful technology.
Shareholders also approved Tesla’s investment in xAI, another Musk venture, and rejected a proposal that would have made it easier for shareholders to sue the company by lowering the minimum ownership threshold required to file legal actions.
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16 Comments
Musk’s potential to become the world’s first trillionaire is a remarkable testament to the growth and influence of the electric vehicle industry. However, the lofty performance targets he must meet also highlight the immense challenges and risks that lie ahead for Tesla.
Absolutely. Musk’s ability to navigate these challenges and deliver on his ambitious goals will be crucial not just for his own personal wealth, but for the continued transformation of the global automotive industry. It’s a high-stakes gamble, but one that could have far-reaching implications.
The collapse in Tesla sales in key European markets is concerning. Musk will need to address those challenges while also meeting the lofty performance targets to unlock the full payout. It’s a high-stakes gamble for everyone involved.
Good point. Tesla’s global expansion and market share will be crucial factors. Musk’s ability to navigate those headwinds could make or break the trillion-dollar payout.
Musk is certainly a polarizing figure, but his ambition and drive have been instrumental to Tesla’s success. If he can deliver on the performance targets, a trillion-dollar payout could be transformative for the company and the EV industry.
That’s a fair point. Ultimately, Tesla shareholders seem to believe Musk can achieve those goals, even amidst recent challenges. It will be interesting to see how it all plays out.
The approval of Musk’s pay package sends a clear signal that Tesla’s investors are bullish on the company’s long-term prospects, despite the recent challenges. It will be fascinating to see if Musk can turn this vote of confidence into a historic trillion-dollar payday.
Agreed. Musk has a track record of defying the odds, but this time the stakes are higher than ever. Tesla shareholders are clearly banking on his ability to overcome the current obstacles and transform the company into an unstoppable force in the EV market.
While the pay package is staggering, it aligns Musk’s incentives with those of Tesla shareholders. Maintaining focus on the company’s long-term performance will be crucial, despite any distractions.
Agreed. Musk has a history of taking bold risks, but Tesla’s success has hinged on his vision and execution. Shareholders are betting big that he can deliver again.
Love him or hate him, Musk’s impact on the EV industry has been undeniable. This pay package underscores just how much Tesla and its investors are banking on his continued leadership and vision.
Absolutely. Musk has proven he can achieve the seemingly impossible, but the bar has been set incredibly high this time. It will be fascinating to see if he can pull it off.
The timing of this vote is interesting, given Tesla’s recent challenges. Shareholders must be confident that Musk can weather the storm and deliver on his ambitious goals. It’s a high-risk, high-reward bet.
You’re right. Tesla and its investors are clearly doubling down on Musk’s leadership, despite the current headwinds. It will be a critical test of his abilities to transform this into a trillion-dollar success story.
While the potential payout is mind-boggling, it’s important to remember that Musk’s compensation is heavily performance-based. Tesla shareholders are taking a big gamble, but the upside could be transformative for the company and the industry.
Exactly. Musk’s compensation is designed to align his interests with those of Tesla’s shareholders. If he can deliver on the ambitious targets, it could solidify Tesla’s position as a global EV leader.