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The shareholders of Tesla have agreed to a $1 trillion compensation package for CEO Elon Musk. Musk’s pay is the largest corporate compensation deal in history. The vote took place during Tesla's annual general meeting on Thursday in Austin, Texas. More than 75% of shareholders voted in favor of Musk's long-term plan for Tesla to transform from an electric vehicle manufacturer to an artificial intelligence and robotics leader.
The approval reinforces investor faith in Musk’s leadership. The package, which could amount to $878 billion after adjustments, ties Musk’s earnings to a series of ambitious operational and valuation milestones that aim to propel Tesla beyond cars into autonomous driving, humanoid robotics, and AI chip development.
"What we are about to embark upon is not merely a new chapter of the future of Tesla, but a whole new book," Musk told shareholders.
Accompanied by the company’s dancing humanoid robots, he emphasized Tesla’s next phase, launching the Cybercab robotaxi in April, unveiling the next-generation Roadster, and potentially building a massive AI chip fabrication facility in partnership with Intel.
The pay plan’s approval followed months of debate among major investors and analysts. While critics labeled it “excessive and unnecessary,” supporters argued it was essential to retain Musk’s commitment and align his goals with shareholder interests.
The compensation package requires Tesla to achieve key benchmarks, which are to produce 20 million vehicles annually, have 1 million robotaxis in operation, and generate $400 billion in core profits.
Additionally, Tesla must achieve a valuation between $2 trillion and $8.5 trillion, with Musk getting 1% of the company’s shares for each milestone achieved.
The vote also approved Tesla’s investment in Musk’s AI startup, xAI, although many shareholders abstained, citing potential conflict-of-interest risks.
Corporate governance experts, including Jessica McDougall of Longacre Square, noted that investors would seek greater oversight to ensure boundaries between Tesla and xAI remain clear.
Norway’s sovereign wealth fund and proxy advisory firms Glass Lewis and ISS opposed the proposal, warning it could dilute shareholder value.
Also Read: Tesla Strikes $2B Battery Deal With Samsung SDI for Bold Clean Energy Expansion
The approval cements Musk’s influence over Tesla’s next decade amid its shift toward AI integration, robotics innovations, and self-driving technology.
Although there are concerns regarding Musk's political rhetoric and distractions from his other ventures, including SpaceX and xAI, investors seem confident that his vision will result in exponential growth.
As Musk put it, “What we are about to build isn’t just the future of Tesla, it’s the foundation of an entirely new kind of company.”
If all the targets are accomplished, Musk will be entitled to 12% of Tesla’s shares, which would not only assure his place as the world's richest person but also as the architect behind Tesla's transformation into an AI giant.
