Elon Musk's $1T Pay Package Passes With 75% Shareholder Approval

Elon Musk has secured approval from a majority of Tesla shareholders for his proposed $1 trillion (£761.8 billion) pay package, despite significant opposition from proxy advisory firms such as Glass Lewis and Institutional Shareholder Services. The decision at the company's annual shareholders meeting in Austin, Texas, marks a pivotal moment in Musk's leadership and compensation strategy.

Strong Support Despite Opposition

The voting results revealed that 75% of shareholders voted in favour of Musk's eye-watering remuneration plan. The approval comes as a relief for Tesla's board, which warned that Musk could walk away if the proposal was rejected. The deal is designed to incentivise Musk to steer the company towards aggressive growth milestones over the next decade.

Details of the $1 Trillion Package

The package involves 12 tranches of share grants, which Musk will receive if Tesla hits specific milestones, including market capitalisation targets and operational achievements. These milestones would significantly boost Musk's ownership stake from approximately 13% to 25%, adding over 423 million shares to his holdings.

The first tranche will be triggered if Tesla's market cap reaches $2 trillion (£1.5 trillion). Currently, Tesla's market cap exceeds $1.5 trillion (£1.1 trillion). Subsequent tranches are contingent on the company's valuation increasing by increments of $500 billion (£380.9 billion), up to a potential $8.5 trillion (£6 trillion). To unlock the total package, Tesla's market cap must hit $8.5 trillion.

In addition, Musk must drive Tesla's annual adjusted profit to $50 billion (£38 billion), rising to $400 billion (£304.7 billion). This compares to Tesla's Q3 adjusted EBITDA of around $4.2 billion (£3.2 billion). Other milestones include reaching 20 million electric vehicle (EV) deliveries, 10 million active Full Self-Driving (FSD) subscriptions, deploying 1 million Optimus humanoid robots, and operating 1 million robotaxis.

As of September, Tesla has delivered over 8 million vehicles, according to a proxy statement. The ambitious targets underline Musk's focus on scaling Tesla's AI, robotics, and EV operations.

Musk Explains Why He Sought $1T Package From A $1.5T Company

Musk explained his motivation in a recent X post, emphasising that the package isn't about money but about maintaining control. He expressed concern about activist shareholders and proxy advisory firms that, in his view, could push him out or influence Tesla's future direction.

'If I can just get kicked out in the future by activist shareholder advisory firms who don't even own Tesla shares themselves, I'm not comfortable with that future,' he wrote. Musk's stance reflects his desire to safeguard Tesla's strategic vision, especially as the company advances its robotics and AI initiatives.

A Path to Trillionaire Status

The approval aligns with recent forecasts by Forbes, which predicts Musk could become the world's first trillionaire by early 2033, as the first of two vesting dates for his Tesla compensation package approaches. Musk's wealth continues to grow at a rapid pace, driven by Tesla's soaring valuation and his other ventures.

Wedbush Analyst Extremely Bullish on Tesla

Wedbush analyst Dan Ives remains highly bullish. Just days after Musk disclosed purchasing $1 billion (£761.8 million) worth of Tesla shares in late September, Ives set a 12-month price target of $600 (£457) per share — implying substantial upside.

Wedbush maintains an outperform rating on Tesla, citing its accelerating AI and autonomous vehicle developments. Ives projects Tesla will reach a $2 trillion (£1.5 trillion) valuation by early 2026 and $3 trillion (£2.2 trillion) by the end of the year, as the company ramps up its autonomous and robotics segments.

Ives also predicts Tesla will launch robotaxis in over 30 U.S. cities within the next year. He estimates the AI and autonomous market opportunity alone is worth around $1 trillion. Over the next decade, Tesla could dominate up to 70% of the global autonomous vehicle market, thanks to its advanced AI capabilities.

While Musk's $1 trillion pay package has sparked debate, it underscores his commitment to pushing Tesla's boundaries. The shareholder approval signals confidence in Musk's vision, even as critics question the package's scale and fairness. As Tesla continues to innovate and expand its AI and robotics ventures, Musk's strategic control remains central to the company's future trajectory.

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