Tesla shareholders awarded CEO Elon Musk a pay package on Thursday that could grant the tech entrepreneur nearly $1 trillion in compensation over the next decade.
The pay package would make Musk the best-compensated CEO ever recorded. According to a securities filing in September, Musk would rake in roughly $900 billion over the duration of the agreement.
The full compensation would only be delivered if Musk vaults the company from its present value of $1.1 trillion to $8.5 trillion, a figure that exceeds the current combined market values of Meta, Microsoft and Google-parent Alphabet, the filing says.
The compensation package also includes a set of production goals, including one million Robotaxis in commercial operation and the delivery of one million humanoid robots over the next 10 years, according to the securities filing.
Before Tesla released the results of the shareholder vote, some major shareholders said they had voted down the proposal. Norway’s $2 trillion sovereign wealth fund said Tuesday that it had voted against the pay package, raising concerns about its scale and potential risks.
“While we appreciate the significant value created under Mr. Musk’s visionary role, we are concerned about the total size of the award, dilution, and lack of mitigation of key person risk consistent with our views on executive compensation,” Norges Bank Investment Management, the manager of the fund, said in a statement.
(NEW YORK) — Musk, considered the world’s richest person, currently boasts a net worth of about $504 billion, according to Forbes. If he were to receive the full pay package, Musk would become the world’s first-ever trillionaire.
The pay package could also increase Musk’s ownership stake in Tesla to as much as 29%. Musk has long pursued a larger ownership stake.
“We are at a pivotal juncture in Tesla’s history, and the proposals the Special Committee has carefully designed and the Board has put forward will help determine Tesla’s future,” the company’s website said earlier this week. “If you believe, like us, that Elon is the CEO that can make our ambitious vision a reality, vote NOW.”
Online voting among shareholders closed at 11:59 a.m. ET on Wednesday.
The company’s new compensation package arrives as Musk’s previous payment plan remains in legal limbo.
Last year, a Delaware judge twice struck down a $50 billion pay package for Musk put forward by the company in 2018.
Chancellor Kathaleen McCormick of the Court of Chancery, which litigates corporate governance litigation for companies incorporated in Delaware, initially declared that the negotiations surrounding the package had been inappropriate, due to a lack of independence among board members and problematic influence by Musk over those negotiations.
In a second ruling, McCormick decided that an additional shareholder vote on the compensation package — even if made with full knowledge of the initial problems surrounding the negotiation of the agreement — could not undo those problems. Musk has appealed the ruling.
Tesla announced a 12% jump in revenue over the third quarter in October, snapping a streak of two consecutive quarters of falling sales.
Still, earnings fell short of analysts’ expectations, causing a drop in the stock price. Overall, shares of Tesla have climbed about 16% this year, putting them roughly in line with a jump in the S&P 500 over that period.
Musk’s work as a “special government employee” with the Trump administration, which ended in May, set off demonstrations at Tesla dealerships worldwide in protest of his effort to slash government spending as leader of the Department of Government Efficiency.
On an earnings call in June, Musk fielded a question about his control of the company, which a Morgan Stanley analyst said was 13%.
“As I mentioned before, I think my control of Tesla should be enough to ensure that it goes in a good direction, but not so much control that I can’t be thrown out if I go crazy,” Musk said in jest.
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