SAN FRANCISCO / AUSTIN, TEXAS – Tesla (TSLA.O) shareholders are set to vote Thursday on a proposed pay package that could make CEO Elon Musk the highest-paid executive in history, potentially earning up to $878 billion if ambitious company milestones are met. The vote takes place at Tesla’s Austin factory during the annual general meeting, alongside other proposals that could significantly shape the electric vehicle giant’s governance and strategic direction.
Musk Pay Package: The World’s Largest
The proposed compensation plan ties Musk’s payout to a series of operational and financial milestones over the next decade, including:
- Delivering 20 million vehicles by 2035
- Operating 1 million robotaxis on roads
- Achieving Tesla stock valuation milestones ranging from $2 trillion to $8.5 trillion
Tesla currently has a market value of over $1.5 trillion. While Musk is expected to vote his roughly 15% stake in favor of the package, some major institutional investors—including Norway’s sovereign wealth fund—have opposed it, labeling the payout excessive.
The vote also addresses a replacement pay package in case Delaware courts reject Musk’s previous compensation plan, ensuring continuity for the CEO’s incentives.
xAI Investment Proposal
Shareholders will also consider whether Tesla should invest in Musk’s artificial intelligence startup, xAI. While Musk publicly supports backing the company, Tesla’s board has not endorsed the plan. Investors must weigh whether an investment in xAI advances Tesla’s AI and robotics ambitions or presents potential conflicts of interest as Musk’s ventures increasingly intersect.
Corporate Governance Changes
Tesla shareholders are voting on additional governance measures:
- Supermajority Voting: A proposal to eliminate Tesla’s supermajority voting requirement in favor of a simple majority standard. Previous attempts to change this rule in 2019, 2021, and 2022 failed. The vote will indicate how much influence shareholders are willing to grant Musk.
- Political Neutrality Policy: A shareholder proposal calls for Tesla to adopt a formal policy banning partisan activity by the company and its leaders, with oversight assigned to a board committee. Tesla directors oppose the measure, citing existing disclosure policies. This proposal tests investor sentiment regarding Musk’s public persona and political positions, including his past support for U.S. political figures.
Market and Investor Implications
- Shareholder Confidence: Approval of Musk’s pay package would signal strong confidence in his leadership and vision for Tesla’s expansion into AI and robotics.
- Corporate Strategy: Votes on xAI investment and governance changes may reshape Tesla’s strategic priorities and decision-making structure.
- Reputational Risk: Political neutrality measures reflect growing investor attention to reputational risks tied to Musk’s public profile.
Key Takeaways
- Tesla shareholders vote on a potential $878 billion CEO pay package tied to ambitious operational and valuation goals.
- Investors will decide on a proposal for Tesla to invest in Musk’s AI startup xAI.
- Votes include supermajority voting changes and a political neutrality policy, both with governance implications.
- The outcome will influence Musk’s control over Tesla, investor confidence, and strategic priorities in AI, EVs, and robotics.
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