Tesla Shareholders Approve $1 Trillion Elon Musk Pay Package, Outlining Aggressive Growth Targets Through 2035
On Thursday, Tesla voting shareholders greenlit a historic, one-of-a-kind $1 trillion compensation package for chief executive Elon Musk. The full incentive plan will vest entirely by 2035, contingent on Musk and the company hitting a string of extremely ambitious financial and production performance targets. If all milestones are met, Musk’s ownership stake in Tesla will jump to roughly 25%, up from the 12% he currently holds. Preliminary vote results show more than 75% of participating shareholders backed the proposal.
Musk celebrated the win onstage at Tesla’s Gigafactory in Austin, Texas, where he appeared alongside two of the company’s Optimus humanoid robots that performed a dance routine for the crowd. “Look at us, this is sick,” he told attendees.
But unlocking the full pay package will require Tesla to expand far beyond its core electric vehicle business, and prove Optimus can do far more than dance. The company will also need to outpace all rivals in autonomous driving technology and the global robotics industry. “Tesla will have to be the market leader not just in the US but also Europe and other major regions,” says Seth Goldstein, a senior equity analyst at financial services firm Morningstar.
To hit all required targets, Tesla will need to reach an $8.5 trillion market valuation over the next 10 years, deliver 20 million new vehicles to customers annually, roll out 1 million Optimus robots, operate a fleet of 1 million robotaxis, and record 10 million active subscriptions to its Full Self-Driving software in a single three-month period, in addition to a slate of smaller financial goals.
Thursday’s approval marks a key victory for Musk, whose 2018 compensation package (a $50 billion payout) has been tied up in litigation for years. A shareholder sued over the 2018 plan, alleging Musk held excessive influence over Tesla’s board and that the company failed to uphold its fiduciary obligations to shareholders. The lawsuit, filed in Delaware’s Chancery Court, prompted Tesla to reincorporate in Texas. An appellate panel of judges heard arguments in the case in October, and a final ruling is expected in the coming months.
Ahead of this week’s vote, Tesla’s board argued the record-breaking pay package was necessary to retain Musk as CEO and keep him focused on the automaker’s long-term growth. During a call with investors last month, Musk noted he would struggle to advance Tesla’s work in robotics and autonomy without holding significant control over the company. “If we build this robot army, do I have at least a strong influence over this robot army?” he asked. “I don't feel comfortable building that robot army unless I have a strong influence.”
After the vote, Musk told investors gathered in Austin that production of the Cybercab — a fully self-driving vehicle designed without a steering wheel or sideview mirrors — will launch in April. The company still needs federal regulatory approval to put the unconventionally designed vehicle on public roads.
He also announced Tesla will quickly expand its robotaxi service to multiple new U.S. cities, including Dallas, Las Vegas, Miami, and Phoenix. Tesla has run a small, invite-only autonomous taxi pilot in Austin since late June, but every vehicle in the program has carried a human safety rider in the front seat, ready to take over if the autonomous technology fails. Musk confirmed those safety riders will be removed from all Austin-based test vehicles by the end of the year. Tesla currently runs a limited ride-hailing service in the San Francisco Bay Area with human drivers behind the wheel, who use the company’s Full Self-Driving (Supervised) driver assistance technology; fully autonomous commercial passenger service is not legally permitted in California.
Musk also added that Tesla will officially unveil the next-generation Roadster sports car on April 1. The company first opened reservations for the updated vehicle back in 2017.
