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Tesla shareholders approved a US$1 trillion compensation package for Chief Executive Officer Elon Musk, the largest payout ever awarded to a corporate leader. The unprecedented move was announced on Thursday at the electric vehicle maker’s annual meeting, culminating a weeks-long campaign by the board, the CEO and prominent retail investors to build support. The pay agreement clears a path for Musk, the world’s richest person, to become the first ever trillionaire and expand his stake in Tesla to 25 per cent or more over the next decade. To achieve the full payout, he will have to deliver on targets to significantly expand Tesla’s market value, revive its flagging car business and get the fledgling robotaxi and robotics efforts off the ground. Musk took to the stage in Austin, Texas, along with dancing robots. “What we are about to embark upon is not merely a new chapter of the future of Tesla, but a whole new book,” he said. “This really is going to be quite the story.” He added: “Other shareholder meetings are like snoozefests, but ours are bangers. I mean, look at this. This is sick.” Shares of Tesla rose about 1 per cent in after-hours trading. The proposal was approved with over 75 per cent support. The compensation vote was seen as pivotal for Tesla, after Musk suggested he could step down or spend more time with his other companies if he did not get greater control over the carmaker. He is now likely to remain at the helm as Tesla pursues an ambitious agenda built around driverless vehicles and artificial intelligence. A win for Musk was widely expected as the billionaire was allowed to exercise the full voting rights of his roughly 15 per cent stake after the carmaker moved to Texas from Delaware, where a legal challenge has held up a previous pay rise. The approval comes even after opposition from some major investors, including Norway’s sovereign wealth fund. The vote will also allay investor concern that Musk’s focus has been diluted with his work in politics as well as in running his other companies, including rocket maker SpaceX and artificial intelligence start-up xAI. The board and many investors who lent their endorsement have said the nearly US$1 trillion package benefits shareholders in the longer run as Musk must ensure Tesla achieves a series of milestones to get paid. Goals for Musk over the next decade include the company’s delivering 20 million vehicles, having 1 million robotaxis in operation, selling 1 million robots and earning as much as US$400 billion in core profit. But in order for him to get paid, Tesla’s stock value has to rise in tandem, first to US$2 trillion from the current US$1.5 trillion, and all the way to US$8.5 trillion. Under the new plan, Musk could earn as much as US$878 billion in Tesla stock over 10 years. Musk would be given as much as US$1 trillion in stock but would have to make some payments back to Tesla.
