Tesla shareholders have overwhelmingly approved a record-breaking compensation package for CEO Elon Musk, potentially valued at up to $1 trillion over 10 years. The proposal, which was approved on Thursday, November 6, at Tesla's annual meeting in Austin, Texas, marks the largest payout ever granted to a corporate leader and is designed to secure Musk's ongoing commitment to the company, particularly as it advances in artificial intelligence and robotics.

This unprecedented pay package, which received over 75% support from shareholders, is entirely in stock options and contingent upon Tesla meeting a series of ambitious performance targets. While Musk currently takes no salary, if he achieves all milestones, he stands to gain more than $500 billion, significantly boosting his current net worth which exceeds $500 billion, according to Forbes, and was $461 billion per Bloomberg Billionaires Index earlier. His shares could ultimately be worth $1 trillion if Tesla reaches an $8.5 trillion market capitalization.

To fully vest in the new pay package, Musk must remain Tesla's CEO for seven and a half years, though the agreement permits him to continue his leadership roles at SpaceX and xAI. The compensation plan aims to increase his ownership stake from roughly 12% to potentially more than 25%. Key financial conditions include Tesla's market capitalization rising to at least $8.5 trillion for Musk to receive the full 12% stake, with the first portion becoming available once the company's valuation reaches $2 trillion from its current $1.5 trillion.

Beyond market value, the agreement outlines 12 rigorous operational milestones. These include the delivery of 20 million Tesla vehicles, achieving 10 million active subscriptions for its Full Self-Driving service, producing one million humanoid robots, and deploying one million robotaxis in commercial operation. Additionally, Tesla must meet eight separate profitability benchmarks. The deal also mandates Musk to develop a framework for eventual CEO succession, without setting a specific timeline for his departure.

Musk has framed his desire for this compensation not just as financial reward, but as a critical means to maintain control over Tesla and its future products, especially its robotics ambitions. He voiced concerns about building an "enormous robot army" only to be potentially ousted later, emphasizing that strong influence is necessary for him to feel comfortable pursuing these ventures. He has long touted Tesla's growth potential as "virtually limitless," asserting in July that the company "will be the most valuable company in the world by far" if it achieves its goals in autonomous driving and AI.

Despite the overwhelming shareholder support, the pay package has not been without controversy. Tesla's brand has reportedly suffered among left-leaning consumers due to Elon Musk’s political affiliations and his role in the Trump administration's Department of Government Efficiency (DOGE). Protests and falling revenue have impacted Tesla's sales in the first half of the year, leading Musk to pivot focus towards developing robots and betting on products like household servant robots and self-driving robotaxis to reignite growth. However, CNBC reports these products are not yet market-ready, with droids unavailable for order and robotaxis requiring employees for safety.

The activist group Tesla Takedown vehemently condemned the outcome, criticizing the company’s recent decline in vehicle sales. The group stated, "Elon Musk just got one trillion dollars for failure. Sales are down, safety risks are up, and his politics are driving customers away. This isn't leadership -- it's the world's most expensive participation trophy." Nonetheless, Tesla Chair Robin Denholm and the board urged shareholders to support the proposal, dismissing criticism regarding Musk’s association with divisive political figures and stressing that his retention is crucial for the company’s future and stock stability. Tesla shareholders have historically backed Musk, even after a previous 2018 compensation package worth $55.8 billion was halted by a Delaware court due to shareholder lawsuits, prompting the board to revise and re-introduce a new, larger plan.