Deal aims to retain CEO for at least 7½ years as company pursues AI, robotics, and autonomous driving breakthroughs….
Tesla shareholders on Thursday overwhelmingly approved a massive compensation plan for CEO Elon Musk, potentially worth $1 trillion, designed to secure his leadership as the electric carmaker pushes forward in artificial intelligence, robotics, and autonomous vehicle technology.
The package, announced at Tesla’s annual meeting at the company’s Austin factory, received support from more than 75 percent of investors, a Tesla official said. Musk, visibly elated, thanked shareholders for their backing.
“I’d like to just give a heartfelt thanks to everyone who supported the shareholder votes. I super-appreciate it,” Musk said amid cheers.
The deal is structured to keep Musk at Tesla for at least seven-and-a-half years while increasing his ownership stake from roughly 12 percent to potentially more than 25 percent. Musk has described the company’s growth potential as nearly limitless, predicting Tesla could become the world’s most valuable company if it delivers on autonomous driving and AI innovations.
Tesla Chair Robin Denholm emphasized that retaining Musk is critical to the company’s future, warning that his departure could negatively impact stock performance. Despite controversies surrounding Musk’s political associations, the board and shareholders remain largely supportive of his leadership.
Past pay packages for Musk have also received strong shareholder backing, including a 2018 deal valued at $55.8 billion, though legal challenges have previously delayed implementation. The current plan follows an “interim” award of $29 billion approved in August.
Musk’s compensation is tied to 12 performance milestones, including market capitalization, operating profit, vehicle delivery targets, and product goals. The first payout tranche would be triggered when Tesla reaches a $2 trillion market valuation, up from its current $1.5 trillion.
While activist groups like Tesla Takedown criticized the package, citing falling vehicle sales and safety concerns, analysts such as Wedbush’s Dan Ives called the vote a sign of investor confidence in Tesla’s AI-driven future.
Musk, whose net worth exceeds $500 billion, is already the world’s richest person, according to Forbes. Despite criticism from advisory firms Glass Lewis and ISS, who questioned the necessity and structure of the unprecedented package, shareholders overwhelmingly endorsed the proposal and also voted to reelect board members.
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