Almost 75 percent of Tesla shareholders on Thursday overwhelmingly endorsed a massive pay package for CEO Elon Musk, that could reach $1 trillion.
The pay package -- crafted to ensure Musk's continued service to the electric vehicle manufacturer as it pursues breakthrough technology on artificial intelligence and robotics -- won more than 75 percent support from shareholders, a Tesla official said at the company's annual meeting, AFP reported.
Board members recommended shareholders approve the pay plan, which they introduced in September. Top proxy advisors Glass Lewis and ISS recommended voting against it, according to a report by CNBC.
The package for Musk, already the world’s richest person, consists of 12 tranches of shares to be granted if Tesla hits certain milestones over the next decade. It would also give Musk increased voting power over the company, acceding to demands that he’s made publicly since early 2024.
His ownership would increase from about 13% to 25%, adding more than 423 million shares to his holdings over the next 10 years.
Those shares could be worth about $1 trillion, assuming the company reaches the $8.5 trillion market cap needed to have Musk qualify for the full potential payout. In addition, Tesla needs to achieve a series of either operational or financial targets for him to get the full number of shares, which would be distributed in 12 equal blocks.
Musk thanked the shareholders and the Tesla board soon after the vote was announced. “I super appreciate it,” he said.
Getting all the shares available under this package over the next 10 years would be the equivalent of earning $275 million a day, dwarfing any other executive pay package in history, CNN reported.
Musk is already worth an estimated $473 billion according to Bloomberg’s billionaire tracker, most due to his holdings in Tesla, as well as the other companies he controls, including SpaceX and xAI.
A no vote on Thursday could have meant his exit from Tesla’s CEO office. Tesla’s board said in a filing that Musk had raised the possibility of leaving the company if he didn’t get the assurances of control that the pay package could grant him.
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