Tesla Shareholders Approve Record $1 Trillion Pay Package for Elon Musk

Tesla shareholders, in a significant vote at the company's annual meeting in Texas, have greenlit a record-breaking compensation plan for CEO Elon Musk, which could be worth up to $1 trillion. The package was approved by a three-fourths majority of total votes cast. The Tesla board justified the unprecedented payout by citing the critical role Musk plays in the company's success, warning that his departure would create substantial 'key man risk' for Tesla. The compensation is contingent upon Musk achieving ambitious goals over the next decade, including raising Tesla's market value to $8.5 trillion from less than $1.5 trillion and successfully deploying one million self-driving Tesla Robotaxis. Critics, however, point to Musk's track record of overpromising and underdelivering, citing delays in self-driving technology deployment and flagging sales in key markets, while noting increased competition from companies like BYD and Xpeng. Despite these concerns, investors like Ron Baron's Baron Capital Management have backed Musk, calling him indispensable. Conversely, major institutional investors such as the California Public Employees' Retirement System (Calpers) and Norway's sovereign wealth fund have opposed the package, deeming it excessive and raising concerns about board independence. Even the Vatican commented, highlighting growing wealth inequality. Impact: This news is significant for Tesla's future strategy and investor sentiment. The approval could boost confidence in Musk's leadership and long-term vision, potentially driving stock performance if targets are met. Conversely, failure to meet these ambitious goals could lead to significant backlash. Rating: 8/10. Difficult terms: Key man risk: This refers to the significant business risk that arises when a company is overly reliant on one individual for its success. If that person leaves or becomes incapacitated, the company could suffer severe operational and financial consequences. Robotaxi: A self-driving vehicle designed to operate as a taxi service, picking up and dropping off passengers without human intervention.