Tesla shareholders voted on Thursday to approve CEO Elon Musk's $1 trillion pay package, which is the largest executive compensation plan on record.
Shareholders voted to approve the historic compensation package with 75% voting in favor at the company's annual meeting in Austin, Texas.
Under the pay plan, which was proposed in September, Musk would receive up to about 12% of Tesla's stock, which would be subject to restrictions and worth about $1 trillion if Tesla reaches a market capitalization of $8.5 trillion and other operational milestones over a 10-year period. Tesla's current market valuation is about $1.45 trillion, and Musk currently owns about 13% of the company's outstanding shares.
The revised compensation plan was put forward amid legal uncertainty over the $56 billion pay package he was awarded in 2018, which was voided by a Delaware judge in January 2024 and remains the subject of ongoing litigation.
"I'd like to just give a heartfelt thanks to everyone who supported the shareholder votes," Musk said. He also thanked the board for its "immense support" and said that while many corporate shareholder meetings are boring, Tesla's "are bangers."
Tesla board Chair Robyn Denholm had warned shareholders that the company could lose Musk to his other entrepreneurial pursuits if his pay package is not approved.
Denholm sent a letter to shareholders that asked, "Do you want to retain Elon as Tesla's CEO and motivate him to drive Tesla to become the leading provider of autonomous solutions and the most valuable company in the world?"
"If we fail to foster an environment that motivates Elon to achieve great things through an equitable pay-for-performance plan, we run the risk that he gives up his executive position, and Tesla may lose his time, talent and vision, which have been essential to delivering extraordinary shareholder returns," Denholm added.
Fox Business