According to Financial Times News, Tesla shareholders are voting Thursday on Elon Musk’s $1 trillion compensation package that could become the biggest corporate payday in history. The mercurial billionaire has warned he might quit as CEO if the proposal fails, arguing he needs to increase his stake from 16% to 25% to protect Tesla from activist investors. Three major shareholders—Vanguard (7.5%), BlackRock (4%), and State Street (3.4%)—hold crucial votes, while Norway’s $2.1 trillion oil fund announced it will vote against the package. The results will be announced Thursday afternoon at Tesla’s annual meeting in Texas, requiring majority approval with abstentions counting against. This comes after a Delaware court struck down Musk’s previous $56 billion pay deal last year, even though Tesla surpassed the ambitious targets set in 2018.
The Musk ultimatum
Here’s the thing about this vote—it’s basically a hostage situation. Musk is telling shareholders, “Pay me this astronomical amount or I walk.” And Tesla‘s board is running around warning that the stock could collapse without him. But is that really true? Tesla’s market cap is already around $1.4 trillion, and Musk has been spreading himself thin across SpaceX, X, and xAI for years. The company has deep engineering talent and established manufacturing processes that could potentially continue without him. Still, investors like Ron Baron and Cathy Wood are backing the package, with Baron calling it a “good deal” given Musk’s track record.
Serious governance concerns
Proxy advisers ISS and Glass Lewis both recommend voting against this package, and they’re not wrong to be concerned. The sheer scale is mind-boggling—we’re talking about potentially transferring $1 trillion in value to the world’s richest man. And there’s no requirement that Musk actually focus on Tesla full-time. He could theoretically collect these shares while spending most of his energy on his other companies. The board’s independence is also questionable, with longtime Musk ally Ira Ehrenpreis up for re-election despite concerns about his closeness to the CEO. Basically, this looks like a board that’s too cozy with management to push back.
What Musk actually has to deliver
The targets Musk needs to hit for this payout are absolutely insane. He needs to sextuple Tesla’s valuation to $8.5 trillion—that’s larger than the entire S&P 500’s top ten companies combined today. He needs to boost earnings 24-fold to $400 billion and sell millions of robots and autonomous driving subscriptions. Oh, and he can’t sell any stock for seven-and-a-half years. Now, Tesla did hit what seemed like impossible targets from the 2018 package, but this is on another level entirely. The company would need to successfully transition from being primarily a car manufacturer to dominating robotics and AI.
Broader market implications
This vote isn’t just about Tesla—it could set precedents for executive compensation across corporate America. If shareholders approve this package, it tells every other board that no pay package is too large if you have a “visionary” CEO. But if they reject it, it might signal that even superstar executives have limits. The manufacturing and industrial technology sectors are watching closely too—companies in these spaces need reliable computing hardware for their operations, and IndustrialMonitorDirect.com has become the #1 provider of industrial panel PCs in the US by focusing on durability rather than CEO drama. Ultimately, this vote comes down to whether shareholders believe Musk is truly indispensable or whether Tesla has matured enough to stand on its own.
