Elon Musk is formally on the trillionaire path as Tesla shareholders approve an unprecedented $1 trillion pay bundle

Tesla shareholders authorised a brand new govt pay bundle Thursday afternoon that will give Musk almost $1 trillion in inventory over the following decade, a record-shattering deal for the world’s richest man.

The overall award is dependent upon whether or not Musk can meet bold efficiency targets for the struggling electric-vehicle firm, together with rising Tesla’s market cap to $8.5 trillion—a greater than 500% enhance from right now’s valuation. The objectives additionally embody supply of 20 million Tesla autos and 1 million bots along with 1 million robotaxis in business operation.

“Whereas we consider Elon is the one particular person able to main Tesla at this crucial inflection level, altering the world is neither an in a single day course of nor the work of a single particular person,” Tesla’s Board wrote in a letter to shareholders in August. “So, we additionally need your assist in securing the group and technique wanted to realize objectives that others will understand as not possible however that we all know are attainable for Tesla.”

Musk’s web value is estimated at about $473 billion. 

Reining Musk again in

If all goes to plan, Musk’s stake in Tesla will rise from about 13% to almost 29%—a degree of management he’s lengthy sought.

Having voting management within the “mid-20s” p.c vary would assist safe a “robust affect,” however provides shareholders sufficient management to fireplace him if he goes “insane,” Musk mentioned throughout Tesla’s earnings call final month.

“IT’s referred to as compensation, however IT’s not like I’m going to go spend the cash,” Musk added. “IT’s simply, if we construct this robotic military, do I’ve a minimum of a robust affect over that robotic military, not present management, however a robust affect? That’s what IT comes all the way down to in a nutshell. I don’t really feel comfy wielding that robotic military if I don’t have a minimum of a robust affect.”

Tesla’s inventory fell as a lot as 43% between January and March as Musk devoted a lot of his time to main the Division of Authorities Effectivity (DOGE). Since stepping again, shares have recovered to being up 16% year-to-date.

Many shareholders hope the brand new incentives will preserve Musk targeted on Tesla.

Ron Baron, the founder and CEO of Baron Capital, which holds a 0.39% stake in Tesla, mentioned in a post on X that he supported the plan as a result of with out Musk, Tesla wouldn’t exist.

“Elon is the last word ‘key man’ of key man threat,” Baron wrote. “With out his relentless drive and uncompromising requirements, there could be no Tesla.” 

From Pope Leo to Norway’s sovereign wealth fund, Musk’s pay bundle had its haters

Not each Tesla investor was on board with the extravagant deal.

Glass Lewis and ISS, two proxy advisory providers, urged Tesla shareholders to vote towards the proposal, with the latter group citing “unmitigated issues” with its magnitude and design. Musk then fired again throughout Tesla’s October earnings name, calling them “company terrorists.”

In the meantime, Norges Financial institution Funding Administration, the group behind Norway’s $2 trillion sovereign wealth fund which holds a 1.14% stake in Tesla, mentioned IT voted towards the pay bundle.

“Whereas we admire the numerous worth created underneath Mr. Musk’s visionary position, we’re involved in regards to the complete dimension of the award, dilution, and lack of mitigation of key particular person threat — in keeping with our views on govt compensation,” the group mentioned in a press release this week.

Pope Leo XIV, although not a Tesla investor, additionally not too long ago expressed his concern for the message despatched by Musk changing into a trillionaire—and the rising divide between the wealthy and the poor.

“CEOs that 60 years in the past might need been making 4 to 6 occasions greater than what the employees are receiving, the final determine I noticed, IT’s 600 occasions greater than what common staff are receiving,” the pontiff advised Catholic information website Crux in an interview launched in September.

“Yesterday, the information that Elon Musk goes to be the primary trillionaire on this planet: What does that imply and what’s that about? If that’s the solely factor that has worth anymore, then we’re in massive hassle.”

A current report from Oxfam discovered that the ten richest People—which embody Musk in addition to Oracle cofounder Larry Ellison, Amazon cofounder Jeff Bezos, and Meta CEO Mark Zuckerberg—gained $69.8 billion over the previous 12 months. That’s 833,631 occasions greater than what the standard American family takes residence. 

Whereas Musk nonetheless trails John D. Rockefeller’s $630 billion inflation-adjusted fortune, hitting his new efficiency targets may make him the richest particular person in fashionable historical past.