Tesla shareholders overwhelmingly approved a new performance-based pay package for CEO Elon Musk that could reach $1 trillion over a decade, alongside restoring the 2018 deal. The vote, exceeding 75% approval, ties compensation to ambitious market capitalization and operational milestones in vehicles, FSD subscriptions, robots, and profitability. While most supported the plan, some major investors opposed it due to its size and lack of requirements for Musk's time commitment.
At Tesla's 2025 Annual Shareholder Meeting, investors delivered strong backing for CEO Elon Musk's leadership by approving two compensation packages. The first restored the 2018 pay deal, previously voided by a court, reaffirming shareholders' original decision. The second, a new 2025 CEO Performance Award, offers up to $1 trillion in stock if Musk achieves a series of escalating milestones over the next decade.
These include market capitalization targets starting at $2 trillion—above Tesla's current $1.1 trillion valuation—and rising to $8.5 trillion or more. Operational goals encompass delivering 20 million cumulative vehicles (Tesla has sold about 8 million to date), securing 10 million active Full Self-Driving (FSD) subscriptions or purchases (with 2.9 million HW4 vehicles equipped in the US), deploying 1 million Optimus humanoid robots, and operating 1 million robotaxis commercially. Profitability hurdles range from $50 billion to $400 billion in trailing four-quarter adjusted EBITDA.
The board, led by Chairperson Robyn Denholm, described the approvals as a mandate for Tesla's vision of 'sustainable abundance' through autonomy, Robotaxi, and Optimus. In a letter to shareholders, Denholm stated, 'Your vote was about much more than governance... it was a vote of confidence in our visionary leader, Elon.' She emphasized the shift to AI in the physical world, calling it 'the largest value-creation event in Tesla’s history.'
However, not all agreed. Britain's Legal & General, holding $8.6 billion in Tesla stock, voted against alongside Schroders and USS, citing the package's 'extraordinarily high' size and absence of explicit requirements for Musk to focus on Tesla amid his roles at X and SpaceX. L&G noted, 'This was due to concerns around the size of the proposed award and the lack of explicit requirements to ensure that Musk will focus his time and attention on Tesla.' Baillie Gifford supported it, saying it 'aligned reward with long-term shareholder outcomes.'
The approvals come amid Tesla's strategic pivot to AI and robotics, with EV sales down 6% year-to-date and engineering departures, including Model Y manager Emmanuel Lamacchia and Model 3/Cybertruck lead Siddhant Awasthi. Tesla's stock rose 3.7% to $445.23 following the meeting.
