Tesla shareholders approve Musk’s $1 trillion pay package

Tesla shareholders have approved a compensation package for chief executive Elon Musk that could be worth up to US$1 trillion ($1.8 trillion) over a decade, despite opposition from prominent investors who criticised the size of the plan.

The package, one of the richest in corporate history, would be delivered to Musk — who has a net worth of US$437 billion ($786 billion) — only if Tesla hits specific performance targets under his leadership. Meeting those milestones would make him the world’s first trillionaire.

The proposal received support from 75% of shareholders, though several major investors opposed the plan.

Norway’s sovereign wealth fund, which holds a stake in Tesla, said it would vote against the pay package, while investment advisory firms Glass Lewis and ISS also recommended shareholders reject the proposal.

The New Zealand Superannuation Fund also voted against Musk’s pay package. The fund owns 1,039,392 shares in Tesla, valued at just under $980 million in its latest portfolio disclosure on June 31.

Performance targets set ambitious bar

The compensation plan requires Tesla to achieve extraordinary milestones, including reaching a market capitalisation of US$8.5 trillion ($15.3 trillion) — about six times its current valuation of US$1.4 trillion ($2.5 trillion). The company must also ship 20 million vehicles annually and deliver 1 million of Tesla’s humanoid “Optimus” robots.

The vote comes at a challenging time for Tesla, with the electric vehicle maker’s sales declining earlier this year after Musk led the Trump Administration’s Department of Government Efficiency (DOGE). His role overseeing government workforce reductions antagonised some consumers, with Yale University researchers saying Musk’s actions reduced Tesla’s sales by as many as 1.2 million vehicles over the past three years.

Musk stepped back from DOGE in May, promising to refocus on Tesla.

Analyst backs retention strategy

Wall Street analyst Dan Ives of Wedbush Securities said the generous pay package was necessary to ensure Musk remains committed to Tesla.

“Tesla’s board members have asked shareholders to approve a long-term incentive package for Musk to retain and motivate the CEO to remain in his current leadership role with a new share package where he will only be paid if he attains ‘extraordinary financial returns’,” Ives said in a research note.

Despite Musk’s controversial leadership, Tesla’s sales and stock price have surged over the years. Since going public in June 2010, the company’s stock has returned almost 35,000%, compared with roughly 550% for the S&P 500 over the same period.

Tesla operates globally, including through Tesla New Zealand, which reported revenue of $149.5 million and net profit of $457,120 for the year ended December 31, 2024.