Tesla Shareholders Set to Approve $1 Trillion Pay Package for Musk

UPDATE: Tesla shareholders are on the brink of approving an unprecedented pay package for CEO Elon Musk, potentially worth up to $1 trillion. This monumental decision, set to unfold on July 13, 2023, in Austin, Texas, could redefine corporate governance and power dynamics within the electric vehicle giant.

The staggering pay package is contingent upon Musk achieving ambitious milestones over the next decade, including boosting Tesla’s market capitalization to $8.5 trillion, up from approximately $1.5 trillion today. Should the shareholders approve this plan, Musk’s ownership stake in Tesla would surge from 15% to 25%, amplifying his influence as the company navigates its future.

Proponents argue that this pay structure is essential to keep Musk focused and committed to Tesla’s vision, which includes plans for robotaxis, humanoid robots, and selling 20 million vehicles by 2030. Board chair Robyn Denholm labeled the vote an “inflection point” for Tesla, stressing that failure to pass the package could jeopardize the company’s trajectory and Musk’s involvement.

Critics, however, are voicing strong opposition. The $1.6 trillion Norwegian wealth fund, Tesla’s ninth-largest shareholder, has publicly denounced the pay package as “excessive in size” and “overly dilutive.” Proxy advisory firms ISS and Glass Lewis have echoed these concerns, warning that the deal could transfer “an unprecedented amount of wealth” without any clear justification for such a compensation structure.

Musk has previously faced scrutiny over his compensation, with a $56 billion pay package declared “deeply flawed” by a Delaware judge earlier this year. This ruling has prompted Tesla to relocate its operations to Texas, where regulatory environments are perceived as more favorable to founders like Musk, effectively limiting shareholder challenges and dissent.

The upcoming vote represents more than just a financial decision; it reflects the broader implications of governance at Tesla. As the company seeks to solidify Musk’s control, the implications for shareholders and the future trajectory of Tesla’s ambitious projects loom large.

As the clock ticks down to the vote, stakeholders and analysts alike are closely monitoring the situation. The outcome will reveal not only Musk’s standing within Tesla but also the future direction of one of the world’s most talked-about companies.

Stay tuned for more updates as this story develops.