Tesla shareholders have approved a record-breaking $1 trillion compensation package for Chief Executive Officer, Elon Musk, the largest ever awarded to a corporate leader.
According to the company, more than 75 percent of votes cast were in favour of the plan, which was announced on Thursday during Tesla’s annual general meeting.
The approval follows a vigorous campaign by Tesla’s board, Musk himself, and retail investors to secure backing for the package.
The decision sets the stage for Musk, already the world’s richest person, to potentially become the first trillionaire.
The payout is tied to ambitious performance goals, including expanding Tesla’s market value, revitalizing its electric vehicle division, and scaling new ventures such as robotaxis and humanoid robots under the Optimus project.
“It’s not just a new chapter for Tesla, it’s a new book,” Musk said at the meeting. “That new book is about massively increasing vehicle production and ramping up Optimus faster than anything’s ever been ramped up before in human history.”
The outcome is a crucial victory for Tesla’s leadership after Musk hinted he might reduce his involvement if the deal was rejected. With the new agreement, he is expected to remain at the helm as the company intensifies its focus on artificial intelligence and autonomous transportation.
Tesla’s stock rose less than 1 percent in postmarket trading on Thursday, after initially gaining up to 3.4 percent. Shares have climbed about 10 percent in 2025, slightly behind the S&P 500’s 14 percent gain.
Musk also revealed that Tesla may build its own chip factory to meet rising production demands. “Even when we extrapolate the best-case scenario for chip production from our suppliers, it’s still not enough,” he said. “So I think we may have to do a Tesla terafab. It’s like giga but way bigger.”
He added that 2026 would focus heavily on the Optimus robot, the Tesla Semi truck, and the fully autonomous Cybercab, pending regulatory approvals.
Despite broad support, the pay package faced pushback from several institutional investors and proxy advisory firms, including Norges Bank Investment Management and Institutional Shareholder Services, which criticized its scale and dilution impact on shareholders.
However, Tesla’s board and chair Robyn Denholm launched an aggressive campaign to win over investors. Musk also rallied support online and during earnings calls, insisting that a larger ownership stake was necessary to lead Tesla into an AI-driven future.
Major investors such as Schwab Asset Management and Florida’s State Board of Administration eventually backed the plan.
“Even with the new pay package, there are significant hurdles,” said Dan Ives, an analyst at Wedbush Securities. “Now it’s about driving the most important chapter in Tesla’s history — its autonomous future.”
If all targets are met, Tesla’s market value could reach $8.5 trillion, making Musk’s stake worth around $2.4 trillion — more than five times his current net worth of about $460 billion, according to Bloomberg’s Billionaires Index.
Critics have condemned the package as excessive. New York State Comptroller Thomas DiNapoli described it as “pay for unchecked power, not pay for performance,” while U.S. Senator Bernie Sanders called it “totally absurd.”
“People can’t afford rent or groceries, and one man is being rewarded with more wealth than half the country combined,” Sanders said.
The decision comes months after a Delaware judge struck down Musk’s previous multibillion-dollar compensation plan. Tesla is appealing that ruling and has since moved its legal incorporation from Delaware to Texas.
Meanwhile, Tesla also revealed that shareholders had preliminarily supported a nonbinding proposal to invest in xAI, Musk’s artificial intelligence startup. The board said it would review the vote outcome due to a large number of abstentions.
The approval of Musk’s pay deal marks a defining moment for Tesla and its leadership, signaling renewed investor confidence as the company pushes deeper into AI, robotics, and next-generation mobility.
