Tesla shareholders approved Elon Musk’s $1 trillion pay package

Tesla shareholders overwhelmingly approved a compensation package for CEO Elon Musk that could be worth up to $1 trillion in company stock.

More than 75% of participating shareholders voted to approve the plan, in line with the amount of support Musk has received for previous pay packages. As the result was announced, shareholders in the room at Tesla’s factory in Austin, Texas, began chanting: “Elon! Elon!”

“What we’re about to embark on is not just a new chapter in Tesla’s future, but a whole new book,” Musk said Thursday, surrounded by dancing Optimus robots.

Under the agreement, Musk will not receive $1 trillion immediately. He will not receive a salary. But he stands to make hundreds of billions of dollars and gain more control over Tesla if he helps the company achieve a number of milestones and boost its profits along the way. It will be difficult to remove some of these obstacles. But a lot of it is The versions of the promises were simply watered down Made musk for years.

The pay package is divided into 12 tranches – covering operating targets, adjusted earnings and market value targets – each tranche giving more shares to Musk if those targets are met. For example, Tesla, which today has a market cap of about $1.5 trillion, would need to steadily increase that valuation to reach $8.5 trillion in a decade.

The vote came after two months of vigorous campaigns by Tesla, its board of directors, and many of its executives. The company has repeatedly launched public appeals to shareholders to approve the package. President Robyn Denholm, usually media-shy, gave multiple interviews with major media outlets and lost some of her voice before addressing investors at Thursday’s meeting. Tesla even ran TV ads about voting, something it doesn’t even do with its cars.

“Tesla is at an inflection point — I think I’ve said that 3,000 times over the last few weeks — and the past year has been critical in our history,” Denholm said Thursday.

Musk encouraged shareholders to approve the package because, he claimed, it was the easiest way to give him more voting control at the company. He currently owns about 15%, but has threatened (several times) to leave Tesla if he doesn’t end up controlling about 25%. Musk said that this amount would protect him from being fired and losing control of the “army of robots” that Tesla is building.

Tesla snagged the package in part by presenting the company’s “Master Plan 4” as a visionary statement of where Musk could lead. That document, released in September, was vague and unspecific, a criticism Musk agreed with. He claimed that Tesla would add more details to the “plan” a few days after its release, but nothing has changed in the intervening months.

Tesla’s board brought up this pay package largely because the previous 2018 plan (worth about $56 billion) was hit down By the Delaware Chancery Court last year, after a judge ruled that the company was not transparent about the negotiation process. Tesla has appealed the decision.

Earlier this year, Tesla delivered to Musk $29 billion in stocks to make up for the loss of the 2018 package, but said it would essentially void that amount if Tesla prevailed on appeal.