Tesla Shareholders Approve Elon Musk's Historic $1 Trillion Pay Package
Tesla shareholders approved CEO Elon Musk's nearly $1 trillion pay package with over 75% support, potentially making him the world's first trillionaire if performance milestones are met.
Overview
- Tesla shareholders overwhelmingly approved CEO Elon Musk's massive $878 billion compensation plan at the annual meeting in Austin, Texas, with over 75% of votes in favor.
- This approval could potentially make Musk the world's first trillionaire, significantly increasing his ownership in Tesla from 13% to 25% if all ambitious targets are achieved.
- The pay package is structured into 12 tranches of shares, contingent on Tesla achieving specific market capitalization and operational milestones over the next decade.
- Key targets include increasing Tesla's market capitalization to $8.5 trillion by 2035 and delivering 20 million vehicles within the next 10 years, enabling Musk to earn substantial sums.
- Despite opposition from major investors and advisory firms, the board and entities like the Florida State Board of Administration supported the plan to retain Musk's leadership and vision.
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Analysis
Center-leaning sources frame the story as a significant triumph for Elon Musk, highlighting the shareholder approval as a "resounding victory" that endorses his ambitious vision for Tesla's future as an "AI and robotics juggernaut." They emphasize the performance-based nature of the pay package and its potential to allay investor concerns, while briefly acknowledging opposition and Musk's controversial rhetoric.
"Tesla shareholders on Thursday approved a compensation plan worth up to $1 trillion, capping a yearslong saga over Musk's pay."
Business Insider"The pay deal is set to shepherd in a new era of executive compensation, and comes at a pivotal time for Tesla: Profits have fallen amid its challenges in Europe and China."
Semafor"The approval comes even after opposition from some major investors, including Norway's sovereign wealth fund."
USA TODAY"Despite Musk's controversial leadership, the company's sales and stock price have soared over the years."
CBS News"The pay package would make Musk the best-compensated CEO ever recorded."
ABC News"The pay package was approved by 75% of Tesla shareholders who cast ballots, drawing loud applause from the audience at the AGM in Austin, Texas."
BBC News"The vote is a resounding victory for Musk showing investors still have faith in him as Tesla struggles with plunging sales, market share and profits in no small part due to Musk himself."
Associated Press"The pay plan would give Musk 423,743,904 shares, awarded in 12 tranches of 35,311,992 shares each if Tesla achieves various operational goals and market value milestones."
ARS Technica"Elon Musk is officially on track to become the world’s first trillionaire."
Fortune"Tesla shareholders voted to approve the biggest pay package in history for CEO Elon Musk, in a deal worth up to $1 trillion over 10 years if the company meets a list of benchmarks such as selling 1 million humanoid robots."
NBC News"Musk has tried to pivot Tesla in recent years from an electric car company into something much harder to define."
Gizmodo"Tesla shareholders have overwhelmingly approved a compensation package for CEO Elon Musk that could be worth as much as $1 trillion in company shares."
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FAQ
Elon Musk's pay package is divided into 12 tranches tied to milestones including Tesla reaching an $8.5 trillion market capitalization by 2035, delivering 20 million vehicles, deploying 1 million robotaxis and AI robots, and achieving $400 billion EBITDA over the next decade.
If Elon Musk achieves all the performance goals, his ownership stake in Tesla would increase from about 13% to approximately 25%.
Musk must remain at Tesla for at least 7.5 years to receive partial vesting of the compensation package and 10 years to receive the full award.
The board and supporters like the Florida State Board of Administration believe that Elon Musk's leadership is critical to Tesla’s future growth in AI, robotics, and autonomous driving, and they want to retain him to maximize shareholder value.
Tesla’s board chair warned that failing to approve the plan could risk losing Musk as CEO to his other ventures, which could lead to significant value loss for the company.
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