In a vote during Tesla's annual general meeting, roughly 75% of shareholders backed the proposal. Both Elon Musk, who holds around 13% of Tesla's shares, and his brother Kimbal Musk, a board member, participated in the vote that signals strong confidence in his leadership despite rising competition and market headwinds.
The board argued that retaining Musk's leadership is critical to Tesla's long-term success. Some large institutional investors, including Norway's sovereign wealth fund and CalPERS (California Public Employees' Retirement System), opposed the deal, citing its sheer size. Still, the majority of shareholders viewed the package as an incentive structure, not a handout.
The trillion-dollar challenge
Unlike conventional executive salaries, Musk's compensation will come entirely in the form of stock options, divided into 12 tranches that vest only if Tesla achieves a series of ambitious financial and operational milestones.
To unlock the full $1 trillion payout, the automotive and clean energy company must meet a series of ambitious performance milestones. The company's market valuation must climb from its current level of about $1.54 trillion to an unprecedented $8.5 trillion, with stock option vesting beginning once it reaches $2 trillion.
Over the next decade, Tesla is also expected to deliver 20 million vehicles cumulatively, more than twice the company's total production since its founding. In addition, Musk must lead the successful deployment of 1 million robotaxis and another 1 million humanoid robots, known as Optimus, into commercial operation.
The last condition requires Tesla to generate $400 billion in core profits over the period, one of the most ambitious profitability targets ever set for a publicly traded company.
If Tesla meets all conditions, Musk's total stake in the company could rise to roughly 25%, further solidifying his control and making him the world's first dollar trillionaire.
'A whole new book' for Tesla
Celebrating the shareholder approval at Tesla's headquarters in Austin, Musk described the decision as a turning point for the company.
'What we're about to embark upon is not merely a new chapter of the future of Tesla, but a whole new book,' Musk said, before taking to the stage with a short dance beside Tesla's humanoid robots, to cheers from the audience.
Why the vote matters
The $1 trillion plan underscores a vote of confidence in Musk's ability to drive Tesla into its next phase of growth. Despite a recent 3.8% drop in Tesla's stock price to $444.26 per share, investors remain optimistic.
Tesla's long-term strategy hinges on more than selling cars. Musk's roadmap includes scaling global energy storage, expanding solar infrastructure, and integrating advanced AI systems, all of which could dramatically raise Tesla's valuation if successful.
Still, the path ahead is steep. Achieving an $8.5 trillion market capitalisation would require Tesla to grow more than fivefold, surpassing the current valuations of Apple, Microsoft, and Saudi Aramco combined.
This is not Musk's first eye-popping pay plan. His 2018 compensation package, worth up to $56 billion, drew widespread scrutiny and legal challenges, though Musk ultimately met many of its targets by turning Tesla into the world's most valuable automaker.
Wycliffe Nyamasege
