Tesla's shareholders have approved the largest compensation package in corporate history for CEO Elon Musk. The estimated value of this package could reach $1 trillion.
The decision, approved by more than 75% of votes at the annual general meeting, ties the reward to reaching long-term goals set for the company. Under the terms of this decade-long compensation plan, Elon Musk will not receive a guaranteed salary or cash bonuses.
His compensation will be solely dependent on the growth of Tesla’s market value and operational indicators. To receive the full compensation, Musk must raise the company's capitalization to $8.5 trillion.
Furthermore, one of the main goals is to significantly expand the business of autonomous taxis, namely robotaxis. If the established targets are not met, Musk will receive no reward.
Fully implementing the plan will increase Musk’s stake in the company from the current 13% to about 25%. Elon Musk has previously expressed his desire to increase his shareholding to maintain reliable control over the company’s strategic development.
The Tesla board of directors deemed such a large reward necessary to ensure Musk's full focus and motivation towards the company’s long-term projects. However, the initiative has also faced criticism.
Opponents of the decision, including some major institutional funds, noted that Musk is already a major shareholder and has enough motivation. Their concerns focus on the dilution of shareholder equity and corporate governance risks.
This vote demonstrates that investors have great confidence in Musk's vision to transform Tesla from an electric car manufacturer into a technological giant in the fields of robotics and artificial intelligence. Elon Musk’s previous compensation package, approved in 2018 and valued at approximately $56 billion, was also recognized as one of the largest in history and led to court proceedings at that time.
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