Tesla shareholders voted on Thursday to approve CEO Elon Musk’s $1 trillion pay package, which is the largest executive compensation plan on record.
Shareholders voted to approve the historic compensation package with 75% voting in favor at the company’s annual meeting in Austin, Texas.
Under the pay plan, which was proposed in September, Musk would receive up to about 12% of Tesla’s stock, which would be subject to restrictions and worth about $1 trillion if Tesla reaches a market capitalization of $8.5 trillion and other operational milestones over a 10-year period. Tesla’s current market valuation is about $1.45 trillion, and Musk currently owns about 13% of the company’s outstanding shares.
The revised compensation plan was put forward amid legal uncertainty over the $56 billion pay package he was awarded in 2018, which was voided by a Delaware judge in January 2024 and remains the subject of ongoing litigation.
“I’d like to just give a heartfelt thanks to everyone who supported the shareholder votes,” Musk said. He also thanked the board for its “immense support” and said that while many corporate shareholder meetings are boring, Tesla’s “are bangers.”
TESLA COULD LOSE MUSK IF $1T PAY PACKAGE ISN’T APPROVED, BOARD CHAIR WARNS
Tesla board Chair Robyn Denholm had warned shareholders that the company could lose Musk to his other entrepreneurial pursuits if his pay package is not approved.
Denholm sent a letter to shareholders that asked, “Do you want to retain Elon as Tesla’s CEO and motivate him to drive Tesla to become the leading provider of autonomous solutions and the most valuable company in the world?”
“If we fail to foster an environment that motivates Elon to achieve great things through an equitable pay-for-performance plan, we run the risk that he gives up his executive position, and Tesla may lose his time, talent and vision, which have been essential to delivering extraordinary shareholder returns,” Denholm added.
MUSK PLEADS WITH TESLA INVESTORS TO APPROVE HIS MASSIVE $1T PAY PACKAGE DEAL
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TSLA | TESLA INC. | 445.91 | -16.16 | -3.50% |
Musk took a moment on Tesla’s latest earnings call to urge shareholders to approve the package as he wants enough voting control “to give a strong influence, but not so much that I can’t be fired if I go insane.”
Not all Tesla shareholders are going to support the pay package, and one investor with a sizable stake in the company signaled opposition to the plan in advance of the vote.
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Norway’s sovereign wealth fund, Tesla’s sixth-largest external investor, said it would vote against the compensation plan.
“While we appreciate the significant value created under Mr. Musk’s visionary role, we are concerned about the total size of the award, dilution, and lack of mitigation of key person risk — consistent with our views on executive compensation,” Norges Bank Investment Management said in a post on its website.
Proxy advisory firms Glass Lewis and ISS urged shareholders to reject the pay package.
Last year, Tesla shareholders were asked to vote on reinstating his $56 billion pay package from 2018, and they obliged, with about 77% of shareholders in favor. The pay package was worth about $44 billion at the time of the shareholder vote due to declines in Tesla’s stock price.
Tesla shares have gained over 17% this year.
FOX Business’ Daniella Genovese and Reuters contributed to this report.
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