Tesla Shareholders Approve a Pay Package for Elon Musk Worth Up to $1 Trillion

More than 75 percent voted in favor. Musk gets nothing unless Tesla hits a series of targets over ten years, the largest of which would require the company to be worth $8.5 trillion — more than triple the most valuable company today.

Tesla shareholders voted today to approve a compensation plan for Elon Musk worth as much as $1 trillion, with more than 75 percent of votes cast in favor. It is, by a wide margin, the largest pay package in corporate history, and it is structured so that Musk receives nothing unless a long series of targets is met over the next decade.

The targets are the interesting part. Musk would earn up to about 12 percent of Tesla's stock in tranches, tied to milestones including selling millions of vehicles, putting a million robots into operation, and — for the full amount — taking Tesla's market value to $8.5 trillion. The company is worth a fraction of that today, and no company in history has been worth even half of it. In other words, the trillion-dollar headline is contingent on a version of the future in which Tesla is not primarily a car company but the dominant supplier of self-driving vehicles and humanoid robots.

That is exactly the argument the board made in proposing it: that Musk's attention is the scarce resource, that he has several other companies competing for it, and that only a package of this size keeps him focused on turning Tesla into an AI and robotics company. Critics — including large pension funds and proxy advisers who urged a no vote — argued that no individual's contribution can be worth that much, that the board is too close to him to bargain properly, and that the milestones reward a story rather than a business.

Both sides are describing the same bet. The vote does not say Musk is worth a trillion dollars. It says a supermajority of Tesla's owners would rather promise him one than risk him losing interest.