More than 75% of Tesla’s voting shareholders support Musk’s $1 trillion compensation plan. To receive full compensation, Musk needs to achieve goals such as increasing the company’s market value to $8.5 trillion within ten years, delivering one million humanoid robots, and investing one million vehicles in commercial operations of Robotaxi services. Tesla’s stock price rose by over 3% after the market closed.
Despite repeated reports of opposition from important shareholders in recent times, the vote at Tesla’s shareholders’ meeting narrowly approved a “trillion dollar compensation package” for CEO Elon Musk, the highest corporate executive in history.
After the US stock market closed on Thursday, November 6th Eastern Time, Tesla announced the voting results after its annual shareholder meeting in Austin, Texas, showing that over 75% of the voting shareholders supported the company’s $1 trillion compensation package for Musk. According to media reports, after the announcement of the voting results, enthusiastic cheers erupted at the conference, calling out Musk’s name “Elon”.
Amidst cheers, Musk stepped onto the podium to thank the shareholders present and said, “What we are about to embark on is not just a new chapter in Tesla’s future, but a brand new epic.” He added, “What I want to say is, please continue to hold your Tesla stock
Continuing with Musk’s vision for Tesla’s future. He first talked about Tesla’s humanoid robot Optimus, saying he is confident that AI trained robots can reduce costs, enable more people to access goods, and unleash economic vitality. He vigorously promoted the progress of Tesla’s autonomous driving technology, especially revealing that in a few months, Tesla’s autonomous driving FSD function will allow users to send text messages while driving or when activating the FSD function to control the vehicle.
Musk revealed that Tesla’s pure electric autonomous vehicle Cyberab, which is specially built for the driverless taxi service Robotaxiwill start production in April 2026, and said that automated driving technology will eventually save millions of lives.
Musk’s compensation plan is one of the multiple proposals voted on at Tesla’s shareholder meeting, and shareholder voting on the plan is the most closely watched event for Tesla in recent times. This salary package may help Musk’s personal net worth exceed the $1 trillion mark, and he holds a 25% stake in Tesla, provided that Musk leads Tesla to achieve multiple significant market value and performance goals.
After the shareholders’ meeting approved the compensation plan, Tesla’s stock price, which closed down 3.5% on Thursday, turned up after trading, rising more than 3% at one point, and then slightly turned down afterwards.
Tesla Chairman warns of risk of losing Musk
The compensation plan proposed by Tesla’s board of directors in September this year grants Musk up to $1 trillion worth of stock over ten years, increasing his shareholding from the current 15% to approximately 25%.
According to the plan, in order to receive full compensation, Musk needs to increase Tesla’s market value from the current $1.5 trillion to $8.5 trillion within ten years, and must also have the company sell 12 million cars, commercially operate 1 million autonomous taxi service Robotaxi vehicles, subscribe to 10 million autonomous driving assistance software FSD services, and deliver 1 million humanoid robots.
Musk has previously publicly threatened to leave Tesla if shareholders reject his compensation plan again. The report stated that he had warned Tesla board members that the focus may shift to other companies outside of Tesla, including rocket company SpaceX, artificial intelligence startup xAI, and brain computer interface company Neuralink.
The day before the vote of the general meeting of shareholders, Robyn Denholm, chairman of the board of directors of Tesla, repeatedly stressed the risk of losing Musk when touting the compensation plan on Wednesday, warning that the loss of Musk may lead to Tesla’s “loss of significant value”, because the company’s valuation largely depends on its future commitments of autonomous vehicle and humanoid robots.
Last week, Morgan Stanley warned that if Musk’s compensation plan was rejected at the shareholders’ meeting, Tesla’s stock price could immediately experience a drop of over 10%. Because the proposal’s failure to be approved will be seen by the market as a vote of no confidence in Musk’s leadership, it may also bring uncertainty to the company’s strategic prospects and pose a risk of exacerbating the loss of key talent.
Shareholders such as the Norwegian Petroleum Fund recently expressed their vote against the compensation proposal
Although the market had previously expected Musk’s massive compensation package to be approved, there have been recent reports of significant Tesla shareholders opposing the plan.
Gonglubian.com mentioned last week that the largest public pension plan in the United States, CalPERS, which holds approximately 5 million shares of Tesla stock, has expressed its intention to vote against it. Drew Hambly, Global Director of Equity Investment at CalPERS, stated in an email statement that “Tesla’s proposed CEO compensation plan is many orders of magnitude larger than CEO compensation plans of similar companies. This pension plan typically measures proposed compensation based on performance and industry standards. This plan will further centralize the power of a single shareholder. ”
On Tuesday of this week, Norwegian Petroleum Fund, one of Tesla’s top ten shareholders, expressed appreciation for the enormous value created by Mr. Musk’s visionary leadership, but will vote against Musk’s compensation plan, believing that it may dilute shareholder value and fail to mitigate the “key person risk” of betting Tesla’s future on Musk.
In addition, two shareholder consulting firms, Glass Lewis and ISS, have advised investors to reject the proposal to link Musk’s compensation to stock price and operational performance.
Some executive compensation experts and other major shareholders have warned that compensation plans pose significant risks to investors.
Experts say that the compensation plan violates governance principles, not only because of its large scale, but also because the board of directors has so clearly placed Tesla’s future bet on a leader with many conflicting interests who may consolidate unrestricted power over the company.
Charles Elson, founding director of the Weinberg Center for Corporate Governance at the University of Delaware, stated that Tesla’s board of directors is being “threatened” by a “superstar CEO”.
Krishna Palepu, a professor at Harvard Business School specializing in corporate governance, believes that the compensation plan, by linking Musk’s salary to a significant increase in stock price and requiring him to hold the acquired shares for five years, is in the interest of shareholders. The number is large because the goal is large
No comment content available at the moment