Tesla shareholders voted Thursday to support a pay package for CEO Elon Musk that paves the way for him to become the world’s first trillionaire. The $1 trillion package “consists of 12 tranches of shares to be granted if Tesla hits certain milestones over the next decade,” said CNBC, and could expand the billionaire’s stake in the company from about 13% to 25%.
This is the “largest payout ever awarded to a corporate leader,” according to Bloomberg, and the deal is “designed to motivate the world’s richest man” to refocus on the EV company. This follows his “far-right political rhetoric” that caused pain for the company this year, bringing down sales and profits, Reuters reported.
At the annual shareholder meeting on Thursday, Musk expressed gratitude to shareholders and the Tesla board soon after his pay package was approved. “I super appreciate it,” he said.
Musk doesn’t take any salary, however. The approved pay package comes in the form of a stock grant that would give him as much as 423.7 million additional Tesla shares over the next 10 years. CNN explained that those shares could be worth about $1 trillion, that is, if the company reaches the $8.5 trillion market cap needed to have Musk qualify for the full potential payout.
While the vote clears the way for Musk to become a trillionaire by granting him new shares, the board of directors that came up with the pay package has said that he has to hit several financial and operational targets, including lifting Tesla’s overall market value to $8.5tn, currently $1.4 trillion; delivering 20 million Tesla vehicles and one million robots; getting 10 million subscriptions to Tesla’s Full Self-Driving feature; and bringing one million self-driving Robotaxi vehicles into commercial operation, according to the BBC.
Musk is already worth an estimated $473 billion, per Bloomberg’s billionaire tracker, with much of his fortune coming from his holdings in Tesla and other companies he controls, including SpaceX and xAI.
Amid the backlash over the huge payout, Tesla’s board said that if it had voted to reject the pay package Thursday, Musk could have left the company.
The South Africa-born entrepreneur has said recently that he needs the additional shares not to create more wealth but to have more control over the company.
“It’s not like I’m going to go spend the money,” Musk said on a call with investors last month. “There needs to be enough voting control to give (me) a strong influence – but not so much that I can’t be fired if I go insane.”
During Thursday’s meeting, Musk mentioned robots more than his company’s cars, explaining to shareholders that he plans on ramping up production of Tesla’s Optimus robots “faster than anything’s ever been ramped up before in human history.”
Optimus is designed to be an “autonomous humanoid robot” performing “unsafe, repetitive or boring tasks.” Unveiled as a prototype by the company in 2022, it uses the same artificial intelligence (AI) systems as the ones powering Tesla vehicles. Musk has described the robot as significant to the future of his business.
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