Tesla shareholders approve pay plan for Elon Musk that could make him world’s first trillionaire

Tesla and SpaceX's CEO Elon Musk. (Leon Neal/Pool Photo via AP, File)

SAN FRANCISCO — Tesla CEO Elon Musk scored a resounding victory on Thursday as shareholders approved a pay package of as much as US$878 billion over the next decade, endorsing his vision of morphing the EV maker into an AI and robotics juggernaut.

Shares of Tesla rose about two per cent in after-hours trading. The proposal was approved with over 75 per cent support.

The vote, analysts have said, is a positive for Tesla’s stock, whose valuation hangs on Musk’s vision of making vehicles drive themselves, expanding robotaxis across the U.S. and selling humanoid robots, even though his far-right political rhetoric has hurt the Tesla brand this year.

A win for Musk was widely expected as the billionaire was allowed to exercise the full voting rights of his roughly 15 per cent stake after the automaker moved to Texas from Delaware, where a legal challenge has held up a previous pay rise.

The approval comes even after opposition from some major investors, including Norway’s sovereign wealth fund.

Tesla’s board had said Musk could quit if the pay package was not approved.

The vote will also allay investor concern that Musk’s focus has been diluted with his work in politics as well as in running his other companies, including rocket maker SpaceX and artificial intelligence startup xAI.

The board and many investors who lent their endorsement have said the nearly US$1 trillion package benefits shareholders in the longer run as Musk must ensure Tesla achieves a series of milestones to get paid.

Goals for Musk over the next decade include the company’s delivering 20 million vehicles, having 1 million robotaxis in operation, selling 1 million robots and earning as much as $400 billion in core profit. But in order for him to get paid, Tesla’s stock value has to rise in tandem, first to $2 trillion from the current $1.5 trillion, and all the way to $8.5 trillion.

Under the new plan, Musk could earn as much as $878 billion in Tesla stock over 10 years. Musk would be given as much as $1 trillion in stock but would have to make some payments back to Tesla.