Tesla Shareholders Approve Elon Musk’s Record $1 Tn Pay Package

Elon Musk on Thursday secured shareholder approval for his $1 trillion pay package from electric vehicle giant Tesla, which would eventually give him control of about 25% of the company. He currently owns roughly 15% of the Nasdaq-listed firm. About 75% of shareholders voted in favour of the proposal during the annual meeting, streamed live on Musk’s social media platform, X.

Under Texas law, Musk was able to vote in favour of his own pay package, as well as a series of other proposals.

The package, however, comes with strict performance conditions. To unlock the full value, Musk must lead Tesla to achieve several ambitious milestones, including 20 million annual vehicle deliveries, 10 million active Full Self-Driving (FSD) subscriptions, 1 million Optimus robot deliveries, and 1 million robotaxis in commercial operation.

Tesla must also scale profitably. The company’s first profit target is $50 billion in adjusted EBITDA, rising to $400 billion over four consecutive quarters. This comes despite the significant research and development spending required to accelerate its robotics and AI strategy. Musk has said the company needs to strike a balance between aggressive investment in growth and margin expansion.

The milestones come at a time when Tesla faces intensified competition from Chinese EV makers such as BYD and Xiaomi, slowing electric car adoption in the US and Europe, and the gradual phasing out of government subsidies for EVs. In recent quarters, Tesla’s sales have also been dented by a public backlash linked to Musk’s political ties with President Donald Trump and his Department of Government Efficiency (DOGE).

“What we are about to embark upon is not merely a new chapter in Tesla’s future, but a whole new book,” Musk told shareholders on Friday, appearing on stage alongside prototype Optimus robots.

Meanwhile, Tesla shareholders also re-elected three board directors and approved annual elections for all board members, along with a replacement pay plan for Musk after a previous one was blocked by a legal challenge. Musk, celebrating the outcome, called the meeting “a banger.”

Shareholders also backed Tesla’s plan to invest in Musk’s artificial intelligence startup, xAI, though many abstained. While some raised conflict-of-interest concerns, others saw the partnership as mutually beneficial. Tesla’s autonomous driving ambitions depend on AI advances, while xAI would gain a powerful customer and data source in Tesla.

Several major investors, including Norway’s sovereign wealth fund and proxy advisory firms Glass Lewis and ISS, opposed the plan, warning it could hurt shareholder value.

Earlier, Tesla’s board had cautioned that Musk might step down if the plan was rejected. The approval reassured investors worried about Musk’s attention being split among his ventures, such as SpaceX and xAI. Supporters said the massive pay deal aligns Musk’s interests with long-term shareholder value since it depends on achieving challenging performance targets.

If Musk meets every goal, he could gain up to 12% of Tesla’s shares, valued at around $1 trillion. However, the payout will fluctuate based on the stock’s original valuation. Musk has said he values the voting control the plan offers more than the financial reward, as he aims to lead Tesla into an AI-driven future powered by his vision of a “robot army.”

“With this pay package now approved, keeping Tesla’s biggest asset, Musk, as its leader for the foreseeable future, we continue to believe that AI valuation is being unlocked,” analysts at Wedbush Securities said on Thursday. “We believe the march towards an AI-driven valuation for Tesla over the next six to nine months has now begun, with FSD and autonomous adoption across Tesla’s installed base and the acceleration of Cybercab and Optimus in the US.”

During the meeting, Musk also announced that Tesla’s Robotaxi service will roll out next in Miami, Dallas, Phoenix, and Las Vegas, while removing safety riders in Austin by the end of this year.