Elon Musk’s $1 trillion pay package wins approval

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Tesla’s chief executive, Elon Musk, has reportedly labeled opponents of the compensation plan, which received shareholder backing, as “corporate terrorists.”

Tesla’s shareholders have given their approval to an unprecedented compensation agreement for CEO Elon Musk, which could be valued at as much as $1 trillion over the next ten years, contingent on the fulfillment of demanding performance goals.

According to the terms of the plan, Musk stands to acquire roughly 423.7 million Tesla shares, distributed across 12 distinct tranches. Each tranche is conditional on meeting specific milestones, such as delivering 20 million electric vehicles, deploying 1 million robotaxis, and attaining $400 billion in EBITDA along with an $8.5 trillion market capitalization.

In recent communication with shareholders, Tesla Chair Robyn Denholm issued a caution, stating that rejecting the proposal could jeopardize the company’s retention of Musk’s “time, talent, and vision.”

Despite reports indicating over 75% shareholder approval for the package, notable institutional opposition persists. Norway’s sovereign wealth fund, which holds the position as Tesla’s largest pension-pool investor, publicly voted against the agreement, citing concerns related to dilution, “key-person risk,” and the independence of the board.

Musk characterized critics of the compensation package as “corporate terrorists,” and referred to proxy advisors, including Institutional Shareholder Services and Glass Lewis, as “asinine.”

Those in favor of the deal contend it commits Musk to Tesla for a minimum of eight to ten years, thereby aligning his motivations with shareholders as the company advances into artificial intelligence, robotics, and autonomous mobility. Conversely, advocates for sound corporate governance caution that compensation of this magnitude could establish a concerning precedent.

Currently, Musk holds the title of the world’s wealthiest individual, possessing a net worth of $487.5 billion, as reported by Forbes. This compensation package has the potential to increase his ownership stake in the company from approximately 15% to as much as 29%; however, a failure to achieve the set targets could result in a significantly reduced payout.