Tesla Shareholders Approve Historic Compensation Package for Musk Worth Up to $878 Billion

Tesla shareholders voted in favor of granting CEO Elon Musk a massive compensation package that could be worth $878 billion over the next ten years, in a move considered by observers to be the largest in the history of publicly traded companies in the United States. The package received support from over 75% of total shareholders.

The company's shares rose by about 1% in after-hours trading following the announcement of the voting results.


Background Related to the New Strategy

The enormous mandate reflects the belief of a wide segment of shareholders in Musk's strategy aimed at transforming Tesla from an electric car manufacturer into a broader technology company in artificial intelligence, robotics, self-driving vehicles, and autonomous taxi networks.

However, some analysts believe that Musk's right-wing political rhetoric over the past year has harmed the company's brand image.


Atmosphere of the Meeting and Accompanying Decisions

Musk appeared on stage in Austin, Texas, alongside robots performing a symbolic display. In his speech, he said, “What we are starting today is not a new chapter for Tesla... but a completely new book.”

Shareholders also re-elected three board members and voted in favor of holding annual elections for all board members. They also voted in favor of Tesla investing in the AI startup X.AI owned by Musk, amid concerns due to potential conflicts of interest, but supporters of the move see it as beneficial for both parties.



Political and Legal Backstage

This approval comes after Tesla moved its registration headquarters to Texas following legal battles in Delaware that had stalled a previous compensation package. Despite opposition from some prominent investors, including the Norwegian wealth fund, the vote ultimately came out as expected.

The board had clearly hinted that the risk of Musk's resignation was present if the approval failed.


Operational and Financial Terms of the Package

The package is not a cash salary, but stock grants conditioned on achieving major goals, the most important of which are:

Raising Tesla's market value to $8.5 trillion (currently about $1.4 trillion).

Operating at least one million commercially self-driving “robotaxi” vehicles.


Upon reaching these criteria, Musk will receive 423.7 million new shares.