Elon Musk scored a decisive victory in the shareholder vote over his $1tn pay package, winning his second record stock award in as many years and putting the billionaire’s control of the electric-vehicle maker beyond doubt.
The pay deal was approved by 75 per cent of votes cast at Tesla’s annual meeting on Thursday. If Musk hits all of the ambitious targets, it will add as much as 12 per cent to his stake and give him control of a quarter of Tesla’s shares.
After months of debate and scrutiny, shareholders overlooked governance concerns to back the chief executive whose vision and salesmanship have already propelled Tesla’s market value to $1.4tn — more than all other western carmakers combined.
As the result was announced, Musk emerged on stage at Tesla’s Texas gigafactory to cheers from a handpicked audience of retail shareholders, pumping his fists in the air. His brother and fellow board member, Kimbal, led applause from the front row wearing his signature white cowboy hat.
On a stage lit by neon blue and purple lights in front of a screen with the graffiti-styled slogan “sustainable abundance”, Musk danced to techno music — joined by a pair of boogieing “Optimus” humanoid robots.
“With AI and robotics, you can actually increase the global economy by a factor of 10 or 100. There’s not like an obvious limit,” Musk told the audience in more than an hour of extemporaneous remarks.
He outlined his vision of a future run by artificial intelligence and filled with self-driving vehicles and an “army” of Tesla robots that could perform surgery better than humans and “eliminate poverty”.
“It’s going to be the biggest product of all time by far . . . Optimus is kind of like an infinite money glitch,” he added. “I guess what I’m saying is, hang on to your Tesla stock.”
The annual meeting caps a tumultuous 12 months for Tesla and its hyperactive CEO, who has amassed a $460bn fortune running an empire that includes SpaceX and xAI.
Some investors have pressed Musk to spend more time at Tesla after customer backlash to his foray into US President Donald Trump’s administration hurt the carmakers’ sales.
But most shareholders appeared more concerned with keeping the chief executive, who threatened to quit if the pay vote failed.
Tesla’s valuation largely rests on optimism about Musk’s ability to pull off its pivot to AI and deploy millions of self-driving robotaxis.
“What is Tesla worth without Musk or even a part-time Musk? Much less than it is worth now,” said Brian Quinn, a professor at Boston College Law School.
Musk won a similarly contentious vote at Tesla’s annual meeting last year to reapprove a $56bn pay package that had been struck down by a Delaware judge over concerns about its value and the independence of the board.
Musk was more confident of victory this time, according to a person close to the CEO, because Tesla’s move to Texas allowed him and his brother to vote with their 16 per cent of shares.
Still, after proxy advisers Institutional Shareholder Services and Glass Lewis counselled investors to vote against the proposal, the company’s leadership launched a feverish lobbying campaign in the past two weeks.
A group including chair Robyn Denholm, chief financial officer Vaibhav Taneja and general counsel Brandon Ehrhart spent last week in New York giving interviews and meeting top investors for their support, warning of a bleak future for the carmaker should it lose Musk.
Denholm lost her voice midway through the week, leaving former Chipotle president Jack Hartung — who joined the board in June — to lead the shareholder talks. The chair had barely regained her voice by Thursday, giving a hoarse speech to the Texas meeting.
Tesla’s board found out on Wednesday night that they would have enough votes to win, according to a person familiar with the process. About a third of Tesla’s stock is owned by retail shareholders and about half of those participated, voting overwhelmingly in favour of the package, the person added.
The deal sets up ambitious targets for Musk to unlock his stock payouts in a series of instalments. To reach $1tn, he must sextuple Tesla’s valuation to $8.5tn, boost earnings 24-fold to $400bn and sell millions of robots and autonomous driving subscriptions. Over the 10 years the plan covers, Musk will receive no salary or bonus.
Although full results of the vote have not yet been released, many of the company’s top institutional shareholders must have voted for the package to reach 75 per cent support. Abstentions counted as votes against.
Tesla’s three largest outside shareholders are Vanguard, BlackRock and State Street, which own 7.5 per cent, 4 per cent and 3.4 per cent, respectively, according to the carmaker’s filings. BlackRock and State Street declined to comment. Vanguard did not immediately reply to a request for comment.
The biggest shareholder to publicly oppose the package was Norway’s oil fund. Tesla’s seventh-largest shareholder with a 1.1 per cent stake, the $2.1tn fund objected to “the total size of the award”, the dilution of existing shareholders and the failure to address “key person risk”.
“This is pay for unchecked power, not pay for performance,” said New York state comptroller Thomas DiNapoli, who helped lead a campaign against the proposal. “The board has rewarded distraction and entrenched a CEO who answers to no one.”
But investors largely sided with Musk. Three Tesla directors were reelected despite opposition from both proxy advisers, including Musk ally Ira Ehrenpreis.
A nonbinding shareholder resolution for Tesla to invest in Musk’s AI and social media group xAI was less conclusive. The proposal gained more votes in favour than against, but a high number of abstentions meant the board opted to consider the investment further before acting.
Musk said Tesla’s own AI push could include talks with Intel about manufacturing its new AI5 chip, in addition to Samsung and TSMC. The comments sent Intel’s share price up 1.6 per cent in after-hours trading.
He also floated the idea of Tesla building its own “terra-fab” to increase its chipmaking capacity amid a global race to train and deploy advanced AI models.
Basking in the cheers of his most devoted fans — who thanked him for making them a life-changing sum by investing in Tesla and his defence of free speech on his social media platform X — Musk fielded questions on everything from colonising Mars to uploading human consciousness to cyborg bodies.
“I’m going to say a bunch of things that probably I shouldn’t say, but that’s what keeps it interesting,” Musk said. “Other shareholder meetings are snooze fests, but ours are bangers, this is sick, we’ve got a cyberpunk nightclub here with real robots.”
Additional reporting by Alexandra White in New York
