Elon Musk won shareholder approval on Thursday for the largest corporate pay package in history as investors endorsed his vision of morphing the EV maker into an AI and robotics juggernaut.
The proposal was approved with over 75% support, and Musk bounded to the stage of the company’s annual meeting at its factory in Austin, Texas, accompanied by dancing robots.
Musk, already the world’s richest person, could get as much as $1 trillion in stock over the next decade, although required payments would take the value down to $878 billion.
The vote is crucial for Tesla’s future and its valuation, which hangs on Musk’s vision of making vehicles that drive themselves, creating a robotaxi network across the US and selling humanoid robots, even though his far-right political rhetoric has hurt the Tesla brand this year.
The board warned he could leave if he didn’t get the pay package. While some investors said it was incredibly expensive and unnecessary.
Many saw it as a way to retain Musk and believe that the goals set in the package ensured shareholders would be rewarded as well.
“What we are about to embark upon is not merely a new chapter of the future of Tesla, but a whole new book,” Musk told a cheering group of shareholders.
He then made a string of promises on stage - from, in April, beginning production of the Cybercab, its 2-seater steering-less robotaxi, to unveiling its next-generation Roadster electric sports car.
He also said Tesla would need “a gigantic chip fab” to make AI chips and should consider working with Intel.
Shareholders also reelected three directors on Tesla’s board, voted in favour of annual elections for all board members and approved a replacement pay plan for Musk’s previous package that is held up in court.
“Other shareholder meetings are like snoozefests, but ours are bangers,” Musk said. “I mean, look at this. This is sick.”
Shareholders voted in favour of Tesla investing in Musk’s artificial intelligence startup, xAI, though there were many abstentions.
That could reflect the hesitancy of big investors to bless the arrangement without stronger board oversight, said Jessica McDougall, partner at strategic and governance advisory firm Longacre Square.
Many investors, she said, would be “looking for the board to provide assurances and convictions that there are guardrails in place to be sure there’s not too much mixing of businesses.”
A win for Musk was widely expected as the billionaire was allowed to vote his roughly 15% stake after the automaker moved to Texas from Delaware.
Excluding Musk’s influence, the majority was small enough to warrant review of CEO pay by the board at a typical company, said Jessica Strine, CEO of shareholder advisory firm Jasper Street Partners. At Tesla, she said: Realistically, there is not going to be such a review.“
Some major investors had opposed the plan, including Norway’s sovereign wealth fund, as did proxy firms Glass Lewis and Institutional Shareholder Services.
