Friday, Nov 7: Tesla Inc. shares gained nearly 1.6% in premarket trading after shareholders overwhelmingly approved CEO Elon Musk’s massive $1 trillion pay package, with over 75% voting in favor during the company’s annual meeting in Austin, Texas.
The newly approved plan, one of the largest in corporate history, will grant Musk 12 tranches of shares contingent on Tesla achieving specific market capitalization and operational milestones over the next decade. His stake could rise from 13% to 25%, adding roughly 423 million shares to his holdings if all targets are met.
The first tranche is tied to Tesla reaching a $2 trillion market cap, up from its current $1.54 trillion, with further tranches awarded for every $500 billion increase, scaling up to $8.5 trillion. Operational targets include delivering 20 million vehicles, 10 million Full Self-Driving (FSD) subscriptions, and deploying 1 million Optimus humanoid robots and 1 million robotaxis.
The pay plan follows a Delaware court ruling that voided Musk’s previous 2018 compensation package, citing governance issues. Tesla’s board reintroduced the plan in September, with both Glass Lewis and ISS advising against it.
In addition, shareholders approved a proposal allowing Tesla to explore investment ties with xAI, Musk’s AI venture.
At the meeting, Musk made bold claims that Tesla’s Optimus robots could “eliminate poverty” and revolutionize healthcare, calling them “bigger than cell phones, bigger than anything.”
Despite skepticism around the lofty projections, investor confidence remains high, as Tesla continues to dominate the EV and AI-driven mobility space.
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