Tesla Shareholders to Vote on Elon Musk’s $1 Trillion Pay Package

Tesla shareholders are set to decide on Thursday the fate of a colossal pay package designed to retain Elon Musk long enough to achieve the technological breakthroughs he claims will change the world.

Musk, who has frequently boasted that Tesla’s expertise in artificial intelligence, autonomous driving, and robotics will leave rival tech giants trailing, stands to receive as much as $1 trillion if he meets a series of performance benchmarks—a package unprecedented in corporate history.

Tesla Chair Robin Denholm has appeared on CNBC and other media outlets in recent weeks to promote the plan, signalling the board’s continued strong support for Musk, despite criticism that the billionaire’s alignment with far-right political figures has affected sales.

“Without Elon, Tesla could lose significant value, as our company may no longer be valued for what we aim to become: a transformative force reimagining the fundamental building blocks of mobility, energy, and labour,” Denholm said in a message to shareholders on 27 October.

Musk himself has suggested that he might leave Tesla or take a lesser role if his ownership share is not increased sufficiently to provide him with the influence over the company’s future that he desires. The pay package could raise his holding to over 25 percent of Tesla shares, up from more than 12 percent currently.

“It’s not like I’m going to spend the money,” Musk said during a conference call in October. “It’s just if we build this robot army, [I want] at least a strong influence over that robot army.”

The results of the vote will be revealed at Tesla’s annual shareholder meeting at the company’s factory in Austin, Texas, on Thursday. Anti-Musk protesters plan to demonstrate outside the gigafactory on the same day, following an anti-Musk rally in downtown Austin on Wednesday.

“A trillion dollars is way too much for any person to have under any circumstances,” activist Ethan McBride told AFP, criticising the package as a way to “enrich the man who is funding the degradation of our democracy.”

Musk, with a net worth exceeding $500 billion according to Forbes’ real-time list of billionaires, must meet 12 market capitalisation milestones to claim the full package. The first tranche becomes available if Tesla reaches a market value of $2 trillion. The plan also includes operating profit and product targets, such as delivering 20 million vehicles, and is intended to keep Musk at Tesla for at least seven-and-a-half years.

Musk has described Tesla’s potential growth as virtually limitless, claiming in July that “Tesla will be the most valuable company in the world by far” if it delivers on its vision for autonomous driving and artificial intelligence.

While Musk’s success with Tesla, SpaceX, and other ventures has earned him many admirers, critics argue that Tesla has been slow to introduce new models and that Musk often delays or fails to deliver on ambitious targets.

The pay proposal has faced criticism from advisory firms Glass Lewis and Institutional Shareholder Services (ISS), which Musk has disparagingly called “corporate terrorists.” An ISS analysis on 17 October questioned the rationale for the potential windfall, highlighting that Musk’s financial interests are already closely linked to Tesla’s performance. ISS also warned that the division of the package into “unprecedented” tranches could reduce the need for all goals to be achieved and flagged the lack of explicit requirements for Musk to remain focused on Tesla.

Norway’s sovereign wealth fund, one of Tesla’s ten largest shareholders, announced this week that it would vote against the 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.

Other opponents include New York State Comptroller Thomas DiNapoli. Conversely, Florida state officials have backed the package, citing Musk’s record of creating equity value and calling the proposal the “gold standard for executive compensation.”