Tesla shareholders have approved a performance-based compensation package for CEO Elon Musk that could be worth up to $1 trillion in stock options. The package, ratified by over 75% of voters at the annual meeting, ties rewards to ambitious milestones in market capitalization, vehicle deliveries, and AI projects. It aims to increase Musk's ownership stake and secure his focus on Tesla's future initiatives.
On Thursday, November 6, 2025, Tesla shareholders voted to approve CEO Elon Musk's new incentive-heavy compensation package, with more than 75% support. The deal, which could value Musk's potential stock awards at over $1 trillion if all targets are met, was officially filed with the U.S. Securities and Exchange Commission via Form 4 on Monday, November 11. This follows the rejection of a previous package by courts, and it grants Musk the opportunity to acquire over 423 million shares across 12 performance tranches.
The tranches include escalating goals: achieving a $2 trillion market cap alongside 20 million cumulative vehicle deliveries; $2.5 trillion with 10 million active Full Self-Driving subscriptions; $3 trillion and 1 million Optimus humanoid robots delivered; $3.5 trillion with 1 million commercial robotaxis; and up to $8.5 trillion market cap with $400 billion in adjusted EBITDA sustained for four quarters. Currently, Tesla's market capitalization stands at approximately $1.4 trillion to $1.5 trillion, with Musk holding about 13% to 15% of shares. Success would raise his stake to around 25%, providing greater control, particularly over what Musk calls a 'robot army' from the Optimus project.
Musk receives no base salary and earns nothing without meeting these milestones. During a recent earnings call, he stated, 'If I go ahead and build this enormous robot army, can I just be ousted at some point in the future? ... I don't feel comfortable building that robot army unless I have a strong influence.' Tesla Board Chair Robyn Denholm emphasized shareholder confidence, writing in a letter, 'You chose ambition. You chose to see what is possible.'
The package reflects Tesla's pivot toward AI and autonomy amid challenges in its core automotive business. Global deliveries dropped 13% in early 2025, with China sales falling nearly 36%. Recent recalls affected nearly 380,000 vehicles for power-steering issues, 46,000 Cybertrucks for panel detachment, and 2 million for Autopilot software. Tesla delivered 1.8 million vehicles in 2024 and is projected for 1.6 million in 2025, requiring 28% annual growth to hit 20 million by 2035.
Critics note Musk's history of delayed promises, such as predicting one million robotaxis by 2019 (now fewer than 200 operational) and repeated Full Self-Driving timelines unmet since 2015. Competitors like Waymo and Baidu lead in supervised autonomous fleets, while Tesla's approach relies on camera-based learning without LiDAR. Optimus prototypes can walk and perform basic tasks but require human training via motion-capture suits, with volume production timelines repeatedly pushed to 'next year.'
Denholm described the approval as a mandate for Tesla's 'Master Plan Part IV,' focusing on autonomy and AI to create 'the largest value-creation event in Tesla’s history.' The package bets on Musk transforming Tesla from an automaker into an AI powerhouse, though its success hinges on overcoming regulatory, technical, and market hurdles.
