“Do you want to retain Elon as Tesla’s CEO and motivate him to drive Tesla to become the leading provider of autonomous solutions and the most valuable company in the world?” asked Tesla board chair Robyn Denholm in a question to shareholders that framed one of the most consequential corporate votes in history. The answer, delivered with over 75% approval, gives Musk a pay package worth up to $1 trillion over the next decade, provided Tesla hits an array of aggressive market and operational milestones.
The plan would grant Musk as many as 423.7 million additional Tesla shares, which could boost his ownership from about 13% to 25%. For the full award to vest, Tesla’s market capitalisation needs to reach $8.5 trillion, a 466% jump from current levels and hit targets including delivering 20 million vehicles, having 10 million active Full Self-Driving subscriptions, selling 1 million Optimus humanoid robots, and putting 1 million robotaxis into commercial operation. It must also grow adjusted annual profit from $50 billion to $400 billion. These goals are structured as 12 tranches, each tied to a specific market cap and operational achievements.
This is an unprecedented scale of executive compensation. The package, if fully vested, would overshadow the $56 billion plan Musk secured in 2018, which was later invalidated by a Delaware judge for governance failures. That earlier award remains in litigation before the Delaware Supreme Court, even as Tesla has reincorporated in Texas, where shareholder challenges to board decisions face higher barriers. The size of the new plan has prompted opposition from major institutional investors, such as Norway’s $2 trillion sovereign wealth fund and CalPERS, citing dilution and the absence of measures to guard against “key person risk.” Proxy advisory firms Glass Lewis and ISS also recommended voting against, saying that there were “unmitigated concerns” about the design of the award.
Tesla’s board countered that Musk’s leadership is indispensable, especially as the company pivots from an electric vehicle manufacturer to a robotics and AI-driven enterprise. Musk himself said that he needs more voting control to pursue audacious projects without risking his ouster. “There needs to be enough voting control to give me a strong influence, but not so much that I can’t be fired if I go insane,” he told investors. While Musk must remain CEO at least 7½ years to vest any of the shares under the terms of the plan, he can continue to run SpaceX, xAI and other ventures.
The operational milestones also reflect Tesla’s priorities. Optimus, the autonomous humanoid robot introduced in 2022, utilises the same AI driving systems in Tesla vehicles and is designed for “unsafe, repetitive or boring tasks.” Musk has forecast a production cost of $20,000 per unit, with “a lot” in each home and applications ranging from factory work to surgery. He says Optimus can “eliminate poverty” and “be bigger than cell phones.” No commercial units have been delivered so far, however, and timelines remain undefined. The same goes for the robotaxi program, which depends on advancements in Tesla’s Full Self-Driving technology to a point where the company can operate it without human supervision under regulatory scrutiny following incidents involving traffic violations and crashes.
From an engineering and market standpoint, such a scalable product, reliable AI, and integrated autonomous systems are required to achieve the target valuation of $8.5 trillion. Manufacturing 20 million vehicles annually requires a manufacturing network larger than that of today’s leading car manufacturers, while 1 million robotaxis require well-developed urban infrastructure, regulatory endorsements, and trust among the general public in autonomous transportation. The humanoid robot milestone furthers the complexity to supply chain innovation required in actuators, sensors, and AI hardware optimised for human-like movement. The implications for governance are just as profound. The package cements Musk’s control over Tesla’s strategic trajectory, better aligning his incentives with value creation for shareholders while centralising control.
Corporate governance specialists say that the opposition of proxy advisers reveals a larger unease about outsized chief executive power in publicly traded companies, especially when pegged to speculative technologies. Yet retail investors the unusually high proportion of Tesla’s shareholder base proved decisive in approving the plan, mirroring the board’s argument that Musk “gets nothing unless shareholders win big.” For Tesla, the vote signals a high-stakes bet on a future where its autonomous vehicles, robotics, and AI services eclipse its EV business. How well the company engineers its way to those milestones will decide not only Musk’s payout but also Tesla’s position in the next era of technology-driven market leadership.
