Tesla shareholders have approved a controversial pay package for CEO Elon Musk, which could be worth up to $1 trillion if the company meets specific performance goals. Preliminary results indicated that over 75% of votes were in favor of the plan during the annual shareholder meeting held in Austin, Texas.
The pay package includes ambitious targets, such as increasing Tesla’s market valuation from approximately $1.4 trillion to $8.5 trillion. Additionally, Musk must achieve significant profit milestones and product goals, including delivering 20 million cars and operating 1 million robotaxis.
Supporters of the pay plan expressed enthusiasm for Musk’s vision of transforming Tesla into a leader in robotics and artificial intelligence. However, concerns were raised about the lack of safeguards related to key-person risk and the perceived extravagance of the compensation structure.
Musk emphasized the importance of this new phase for Tesla, stating that it represents a significant shift in the company’s trajectory. He encouraged shareholders to hold onto their Tesla stock, suggesting confidence in the company’s future prospects.
Analysts, including Wedbush’s Dan Ives, noted that the approval of Musk’s pay package positions him as a pivotal leader amid the growing AI revolution. Ives maintained a positive outlook on Tesla’s stock, projecting a price target that suggests substantial growth potential.
Despite the majority support for Musk’s compensation, some shareholders hesitated to vote, and the board will review the next steps moving forward. Additionally, there was some reluctance among Tesla’s directors regarding a proposal for investing in Musk’s private AI venture, xAI.
The outcome of the shareholder meeting underscores a strong belief in Musk’s ability to drive Tesla’s expansion beyond traditional automotive markets, while also highlighting the complexities and challenges associated with such a significant pay package.
