Tesla Shareholders to Pay Elon Musk Up to $878 Billion Over the Next Decade

Elon Musk, the founder and CEO of Tesla, achieved a decisive victory on Thursday when shareholders approved a salary package worth up to $878 billion (approximately €760.2 billion at current exchange rates) over the next decade. This endorsement supports his vision of transforming the electric vehicle manufacturer into a giant in artificial intelligence and robotics. Following the announcement, Tesla's shares rose by 1% in after-hours trading. The proposal was passed with more than 75% of the votes in favour.

Prior to the vote, Musk took to the stage set up by the multinational in Austin, Texas, accompanied by dancing robots. "What we are about to embark on is not just a new chapter in Tesla's future, but an entirely new book," he declared in his speech before handing over to the shareholders. "It's really going to be quite a story," he emphasised. "Other shareholder meetings are boring, but ours are spectacular. Look at this. It's crazy," he added with a gesture of exuberant satisfaction, perhaps already aware of his subsequent corporate triumph.

Indeed, Tesla's partners also re-elected three directors to the board, in addition to voting in favour of a substitute remuneration plan for Musk's services, as a legal challenge had blocked the previous package. Shareholders also supported a proposal requesting the board to hold annual elections for all board members.

According to analysts, the vote is positive for Tesla's shares, whose valuation depends on Musk's vision of manufacturing autonomous vehicles, expanding robotaxis across the United States, and selling humanoid robots. However, his far-right political rhetoric during last year's presidential elections and in the subsequent months as an advisor to Donald Trump for his severe budget cuts has harmed the Tesla brand this year.

In any case, a victory for Musk was expected, as the billionaire was allowed to exercise all voting rights of his stake, approximately 15% of the total, after the automaker moved its headquarters to Texas from Delaware—a US state chosen by large corporations for its highly favourable tax conditions—where a legal challenge had blocked a previous salary increase, according to Reuters. The approval comes even after opposition from some major investors, including Norway's sovereign wealth fund.

The vote will also allay investors' concerns that Musk, who had threatened to resign if his substantial pay increase was not approved, has diluted his focus by engaging in politics and managing other companies of his, such as the rocket manufacturer SpaceX and the AI startup xAI. The board and many investors who have backed him have stated that the nearly trillion-dollar package benefits long-term shareholders, as Musk must ensure Tesla reaches a series of milestones to get paid.

Musk's goals for the next decade include delivering 20 million vehicles by the company, deploying one million robotaxis, selling another million robots, and achieving up to $400 billion in core profits. However, for him to get paid, Tesla's stock value must increase in parallel, first to the $2 trillion level from the current $1.5 trillion and then to $8.5 trillion.