Tesla shareholders voted to approve a $1-trillion compensation plan for Chief Executive Elon Musk, a record-breaking package intended to help the world\u2019s richest person focus on the electric vehicle maker. <\/p>\n
Shareholders broke into applause and began chanting Musk\u2019s name at the annual meeting Thursday, where it was announced that more than 75% of voters opted to support the pay plan. <\/p>\n
Under the terms of the package, Musk will earn portions of Tesla shares incrementally if he reaches specific milestones related to company performance and valuation. Experts say Musk would still pocket billions of dollars<\/a> even if he only meets a few of the targets.<\/p>\n The milestones increase over time up to an $8.5-trillion company valuation and also include product goals, such as delivering 20 million vehicles, deploying 1 million robotaxis for commercial operation and garnering 10 million full self-driving subscriptions. Musk stressed in the presentation after the meeting that he has big plans to build up to 1 million humanoid robots per year. <\/p>\n The plan could eventually award Musk a 25% stake in Tesla. He currently owns about 13% of shares, making him the largest individual shareholder. <\/p>\n Less than a year ago, a Delaware judge repeatedly blocked<\/a> a smaller pay proposal. <\/p>\n In a letter<\/a> late last month, Tesla board chair Robyn Denholm urged shareholders to vote in support of the package, writing that Musk might step down from his position if it was not approved. <\/p>\n \u201cThe fundamental question for shareholders at this year\u2019s Annual Meeting is simple,\u201d Denholm wrote on Oct. 27. \u201cDo you want to retain Elon as Tesla\u2019s CEO and motivate him to drive Tesla to become the leading provider of autonomous solutions and the most valuable company in the world?\u201d<\/p>\n Some experts have said that Tesla\u2019s board is beholden to Musk and does not act independently. Chancellor Kathaleen McCormick, the Delaware judge who twice struck down an earlier pay package for Musk in 2024, said the approval process for that package was \u201cdeeply flawed.\u201d<\/p>\n In her decision, McCormick wrote that Musk had exerted unfair influence over shareholders and that negotiations over his pay plan were not legitimate. <\/p>\n Bart Naylor, an expert on corporate governance and shareholder rights with the consumer advocacy group Public Citizen, said Tesla\u2019s board was pushing for the staggering pay plan \u201cbecause Musk told them to.\u201d <\/p>\n \u201cThe plan is unfathomably large,\u201d Naylor said. \u201c$1 trillion is many orders of magnitude beyond what the most overpaid CEO normally makes.\u201d <\/p>\n Musk\u2019s new compensation package is worth 10 times more than the salaries of every Fortune 500 chief executive combined, Naylor said. Fortune 500 executives make an average of $18.5 million a year, totaling $9 billion in compensation annually. <\/p>\n \u201cHe\u2019s got a lot of energy and you might say he\u2019s an above-average CEO, but there\u2019s no way Musk is worth that much,\u201d Naylor said. Musk\u2019s frequent drug use would get other executives fired on the spot, he added. <\/p>\n Several groups, including unions, corporate watchdogs and proxy advisory firms, have publicly opposed the pay package.<\/p>\n Norges Bank Investment Management, which manages revenue from Norway\u2019s natural resources and is one of Tesla\u2019s biggest investors, said earlier this week that it planned to vote against Musk\u2019s proposed pay. The fund holds a 1.16% stake in the company.<\/p>\n Although Musk\u2019s previous pay proposal<\/a> was blocked in court, Naylor said it\u2019s very unlikely the new plan will face legal challenges. Tesla reincorporated<\/a> in Austin, Texas, in 2024, where state law is much more accommodating to corporations than in Delaware. <\/p>\n Board chair Denholm said Musk\u2019s staggering pay is necessary to keep him focused amid distractions, including his other companies, X, xAI and SpaceX. Musk also took a major detour from Tesla earlier this year when he joined the Trump administration as head of the so-called Department of Government Efficiency. <\/p>\n Musk\u2019s foray into politics alienated customers and investors, setting off a brand crisis that resulted in decreased sales and share value. <\/p>\n Tesla is at an \u201cinflection point,\u201d Denholm wrote, as it transitions away from reliance on sales of its traditional electric vehicles. The future of the company depends on the successful deployment of autonomous driving technology, experts say, as well as other artificial intelligence ventures, including the humanoid robot<\/a> Optimus.<\/p>\n At the shareholder meeting, Musk said Optimus would be Tesla\u2019s biggest product ever, capable of ending poverty through expanded human services such as medical care. He said the robot would become more important to society than cellphones. <\/p>\n \u201cI\u2019d like to give a heartfelt thanks to everyone who supported the shareholder vote,\u201d Musk said at the meeting. \u201cWhat we\u2019re about to embark upon is not merely a new chapter of Tesla, but a whole new book.\u201d<\/p>\n Tesla shares have risen 17% this year and fell more than 4% Thursday. <\/p>\n","protected":false},"excerpt":{"rendered":"Tesla shareholders voted to approve a $1-trillion compensation plan for Chief Executive Elon Musk, a record-breaking package intended…\n","protected":false},"author":2,"featured_media":42084,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[28276,28283,28282,28280,28281,1611,4082,48,52,51,47,50,49,16976,26065,28279,28277,28278,5589,28275,72],"class_list":["post-42083","post","type-post","status-publish","format-standard","has-post-thumbnail","category-los-angeles","tag-bart-naylor","tag-big-investor","tag-big-plan","tag-company-performance","tag-delaware-judge","tag-elon-musk","tag-expert","tag-la","tag-la-headlines","tag-la-news","tag-los-angeles","tag-los-angeles-headlines","tag-los-angeles-news","tag-meeting","tag-musk","tag-pay-package","tag-pay-plan","tag-record-breaking-package","tag-sale","tag-tesla-shareholder","tag-year"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/42083","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=42083"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/42083\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/42084"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=42083"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=42083"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=42083"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}