Shareholders Approve Musk’s $1 Trillion Ownership, Sparking Discussion on Governance and Innovation
- Tesla shareholders approved a $1 trillion compensation package for Elon Musk, granting him up to 25% ownership if performance targets like $8.5 trillion market cap and 20M annual vehicle deliveries are met. - The 12-tranche plan faced criticism from major institutional investors over excessive dilution, lack of safeguards, and Musk's growing external ventures, despite retail investor support. - Governance experts warned of "key person risk" as Musk's stake increases, while supporters argue his leadership
On Thursday, Tesla shareholders gave the green light to a landmark $1 trillion pay package for CEO Elon Musk, solidifying his leadership at the company and sparking renewed discussion about executive compensation and board oversight, according to
The compensation plan, divided into 12 segments, requires Tesla to hit targets such as an $8.5 trillion market cap—over five times its current $1.5 trillion—and annual vehicle deliveries of 20 million,
While retail investors largely backed the plan, it faced pushback from major institutional shareholders, such as Norway’s $2 trillion sovereign wealth fund and California’s CalPERS pension fund,
Musk’s reach goes beyond Tesla, as he leads SpaceX,
This approval comes as Tesla navigates a turbulent market. The company’s shares have climbed 14% this year, helped by Musk’s $1 billion stock buy and optimism about AI-driven expansion, a
The compensation package also contains clauses for “covered events” like pandemics or regulatory changes, which could let Musk receive shares even if operational goals aren’t met. Critics say this flexibility weakens accountability. Meanwhile, Tesla’s board is still dealing with legal challenges over its 2018 pay plan, which a Delaware court found was improperly approved.
As Tesla looks ahead, this decision highlights the ongoing tension between bold leadership and traditional governance standards. With Musk’s ownership set to rise, the company’s challenge will be to balance breakthrough innovation with shareholder expectations in the coming years.
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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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