Tesla shareholders have overwhelmingly approved an unprecedented pay package for founder, CEO, and world’s richest person Elon Musk, worth $US1 trillion ($1.5 trillion) if he achieves performances targets over the next decade.
Over 75 per cent of voting shareholders approved the plan on Friday, Australian time, as Tesla held its annual shareholder meeting in Austin, Texas.
Musk’s new package could see him become the world’s first trillionaire by gaining more Tesla shares as part of staged payouts based on the technology company’s profit, production figures, and the number of subscribers to its self-driving technology.
He has been tasked with delivering Tesla’s 20 millionth electric vehicle, as well as 1 million humanoid robots, and 1 million robotaxis.
The company has delivered around 8 million vehicles since 2003, but is facing increasing competition and sales slumps in some markets.
Musk's new targets also include increasing Tesla's market value to $US8.5 trillion ($13 trillion) — more than six times its current market valuation of around $US1.4 trillion ($2.1 trillion).
Billions of dollars could be added to his existing wealth as he begins to partly deliver on such goals and gains more shares in Tesla.
If he reaches all of his targets, Musk could end up roughly doubling his Tesla voting shares to almost 29 per cent of the company.
“I super appreciate it,” Musk told investors following the vote, flanked by dancing prototypes of Tesla’s Optimus robot while he stood in front of a screen displaying the words “Sustainable abundance” — a stated goal of the company.
Some major shareholders vote against incentive plan
Approval of Musk’s latest pay package came despite opposition from several significant investment funds with large positions in Tesla.
Norway’s sovereign wealth fund — the largest in the world and Tesla’s seventh-largest investor — said earlier this month it would vote against the pay package, as it was “concerned about the total size of the award, dilution and lack of mitigation of key person risk”.
The largest public superannuation fund in the US, the California Public Employees’ Retirement System (CalPERS) — which holds about 5 million Tesla shares — also disagreed with the plan.
Prototypes of Tesla's Optimus robot joined Elon Musk on stage for the company's shareholder event. Image: Tesla / YouTube
Tesla’s chair, Australian Robyn Denholm, reportedly warned shareholders in a letter last month that Musk could leave Tesla if his proposed pay package was not approved.
Musk was "critical" to the company's success, Denholm reportedly wrote, warning that the Tesla CEO may lose his “time, talent, and vision” if shareholders did not agree to the incentive proposal.
Supporters of Musk have welcomed overall shareholder approval of the new incentive package, and have argued Musk is the person to lead Tesla as it begins what he called “not just a new chapter for Tesla, but a new book”.
One shareholder told Musk on Friday, “I’d just like to reiterate how grateful we all are to have you on board, ready to lead us to another $7 trillion in market capitalisation, at least.”
“At least,” Musk replied.
Tesla approved an interim stock award to Musk in August, worth around $US30 billion ($45 billion), after a Delaware court threw out an $86 billion (US$55.8 billion) performance bonus which was first laid out in 2018.
The company is appealing the Delaware decision.
Optimus robot ‘will eliminate poverty’, Musk claims
Musk, who is known for often overstating and overpromising, argued the company's Optimus robot would become the best-selling product ever — “bigger than cellphones, bigger than anything”, he said.
“Every human on Earth is going to want to have their own personal R2-D2, C-3PO,” Musk said, referring to popular robot characters from Star Wars.
He added that Tesla planned to begin producing millions of Optimus robots in 2026, before scaling up to 100 million per year and “maybe even a billion a year”.
Musk, who is currently worth an estimated $US500 billion ($770 billion) — more than the annual GDP of many nations — even argued Optimus “will actually eliminate poverty” and provide many people with healthcare.
“People often talk about eliminating poverty, giving everyone amazing medical care,” he told investors.
“Well, there’s actually only one way to do that — and that’s with the Optimus robot.
“With humanoid robots you can actually give everyone amazing medical care.
“Optimus will ultimately be better than the best human surgeon, with a level of precision that is beyond human.”
Tesla will begin mass production of its Semi truck (left) and Cybercab (right) in 2026, Musk says. Images: Tesla / YouTube
Musk also somewhat jokingly suggested Optimus robots could be used to follow convicted criminals and prevent them from committing further crimes.
He said the combination of advances in artificial intelligence and humanoid robots like Optimus was “kind of like an infinite money glitch” due to what he argued was the technology’s potential to increase and improve the global economy.
“Maybe there won’t even be money in the future,” he said.
Tesla was preparing to begin mass production of Optimus, its autonomous Cybercab, and its Semi truck in 2026, Musk said.
He revealed the company also “tentatively” planned to unveil its Roadster 2 sports car in April 2026, before production began “12 to 18 months after that”.
