Tesla’s $1 Trillion Musk Deal: Strategic Move to Keep CEO or Example of Excessive Corporate Power?

At Tesla's annual meeting in Austin, Texas, shareholders gave their approval to a historic $1 trillion pay package for CEO Elon Musk, with more than three-quarters of votes in favor, as reported by a

. This compensation deal, divided into 12 stock tranches, could ultimately give Musk a 25% ownership in if he achieves ambitious targets such as reaching an $8.5 trillion market cap, delivering 20 million vehicles, and rolling out 1 million robotaxis, according to the Los Angeles Times. While some critics claim the package is excessive—ten times the total pay of all Fortune 500 CEOs combined—Tesla's board insists it is crucial to keep Musk focused on the company as he juggles responsibilities at SpaceX, , and the Trump administration, as highlighted in a .

This approval signals a significant change in how corporations are governed. After Musk's 2018 compensation plan was twice struck down by Delaware courts, Tesla moved its incorporation to Texas, where business laws are more flexible, the Los Angeles Times reported. This shift allowed Tesla's board to avoid Delaware's tough oversight on shareholder disputes, sparking concerns about a "race to the bottom" among states with looser corporate regulations, as noted by

. "The core issue for shareholders is straightforward: Do you want Elon to remain as Tesla's CEO?" board chair Robyn Denholm wrote in a message to investors.

Musk's latest pay plan is designed to reward long-term results, requiring him to hit a series of performance milestones to receive shares, according to the MarketWatch article.

Still, some doubt whether these goals are realistic. Bart Naylor from Public Citizen described the plan as "unimaginably huge," pointing out that even partial achievement would earn Musk billions, the Los Angeles Times said. Meanwhile, major institutional investors such as Norway's Norges Bank, Tesla's second-largest shareholder, voted against the proposal, the Los Angeles Times reported.

This approval also brings attention to wider legal and regulatory issues. Delaware's Supreme Court is preparing to review a statute that redefined "controlling stockholder," a decision that could reshape corporate governance across the country, according to a

. The outcome could determine whether Delaware keeps its status as the leading state for corporate law or loses ground to states like Texas, which offer more business-friendly environments, the Bloomberg Law report noted.

Musk, meanwhile, highlighted the compensation plan's importance for Tesla's AI and robotics goals. During the shareholder meeting, he said the package would help the company "eliminate poverty by expanding human services" and make Optimus humanoid robots the next revolutionary technology, as reported by the Los Angeles Times. However, his involvement in politics—including a brief role in the Trump administration—has raised concerns about his focus, with governance experts like Nell Minow calling him a "part-time CEO," according to a

.

This decision highlights a growing pattern: companies are increasingly using state laws to justify unprecedented executive pay. As Tesla's move sets a precedent, it prompts important questions about oversight and the direction of corporate governance in a patchwork legal system, The Guardian observed.

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