Tesla shareholders approve Musk's $1 trillion pay package

Core Viewpoint - Tesla shareholders have overwhelmingly approved a substantial pay package for CEO Elon Musk, potentially reaching $1 trillion, to ensure his continued leadership as the company advances in artificial intelligence and robotics [2][3]. Shareholder Support - The pay package received more than 75% support from shareholders during the annual meeting, indicating strong backing for Musk's leadership [2]. - Musk expressed gratitude for the support, highlighting the positive reception from shareholders at the meeting held in Austin [2]. Musk's Ownership and Influence - The package is designed to increase Musk's ownership stake in Tesla from approximately 12% to potentially over 25% over the next seven-and-a-half years [3]. - Musk has indicated that he may consider stepping back from Tesla if his ownership stake does not provide him with sufficient influence over the company's future [4]. Future Growth Potential - Musk has articulated a vision for Tesla's growth, suggesting it could become "the most valuable company in the world" if it successfully implements advancements in autonomous driving and AI [4]. - Tesla Chair Robin Denholm emphasized the importance of retaining Musk for the company's future, warning that his departure could negatively impact stock performance [5]. Compensation Structure - The pay package is contingent upon Musk achieving 12 milestones related to market capitalization, with the first milestone set at a $2 trillion market value, up from the current $1.5 trillion [11]. - The plan includes operational profit and product delivery goals, such as delivering 20 million Tesla vehicles [11]. Criticism and Support - Activist group Tesla Takedown criticized the approval of Musk's pay package, citing declining auto sales and safety concerns [10]. - Analyst Dan Ives from Wedbush expressed that the shareholder vote reinforces Musk's position as Tesla navigates the AI revolution, enhancing confidence in the company's future [10]. Historical Context - Tesla investors have previously supported Musk's pay packages, including a 2018 deal worth approximately $55.8 billion, which faced legal challenges [8]. - Following a recent ruling from Delaware, Tesla's board revised Musk's compensation, first approving an interim award of about $29 billion before introducing the larger plan [9].