Tesla shareholders hand Elon Musk a path to $1 trillion fortune, but it won't be easy; here’s why

Tesla shareholders have approved an unprecedented pay package for CEO Elon Musk that could make him the world’s first trillionaire, but only if he meets a series of daunting performance targets over the next decade.

At the company’s annual meeting in Austin, Texas, more than 75% of shareholders voted in favour of granting Musk stock awards worth up to USD 1 trillion, following weeks of intense debate over his leadership, the carmaker’s recent struggles, and the sheer scale of the proposed compensation.

“Fantastic group of shareholders,” Musk said after the vote, adding, “Hang on to your Tesla stock.”

The approval is a major vote of confidence in Musk’s leadership at a time when Tesla faces declining sales, falling profits, and a loss of market share amid growing competition in the electric vehicle market. The company’s car sales in Europe plunged last month, including a 50% drop in Germany, according to recent reports.

But many investors continue to view Musk as the visionary who once rescued Tesla from near bankruptcy and transformed it into one of the world’s most valuable automakers.

However, Musk’s path to becoming a trillionaire is far from guaranteed.

The board’s pay plan ties his potential windfall to a series of ambitious operational and financial goals, including increasing Tesla’s market value nearly sixfold and delivering 20 million electric vehicles over the next 10 years, more than double what the company has produced since its founding.

The billionaire also has to deploy one million humanoid robots, which he has described as a “robot army”, and drive the company’s next phase as an artificial intelligence powerhouse.

The package’s approval came despite opposition from some of the world’s largest institutional investors, including CalPERS, the biggest US public pension fund, and Norway’s sovereign wealth fund.

Corporate governance advisory firms Institutional Shareholder Services (ISS) and Glass Lewis had urged shareholders to reject the proposal, calling it excessive and poorly structured.

But supporters argued the package was necessary to keep Musk focused on Tesla as he juggles several other ventures, including SpaceX, X, and his AI startup xAI.

Musk, whose net worth Forbes estimates at USD 493 billion, has said the vote was less about money and more about greater control over the company’s future direction.

Tesla shares, which have gained about 80% over the past year, rose in after-hours trading following the vote but later settled largely unchanged at USD 445.44.

Shareholders also approved a proposal allowing Tesla to invest in Musk’s other venture, xAI, while rejecting a plan to make it easier for small investors to sue the company.