Tesla Trillion: Shareholders Approve Musk’s Significant CEO Pay Award
7 November 2025
Shareholders at electric vehicle (EV) manufacturer Tesla have voted in favour of a high-profile U$1 trillion pay award for CEO Elon Musk which would see his position as the world’s richest person further solidified.
While full voting results for the meeting are yet to be published, more than 75% of votes cast were in favour of the management proposal to approve 2025 CEO performance award according to preliminary figures announced during Tesla’s 2025 shareholder meeting livestream. The basic structure of the pay package comprises 12 tranches of 1% of the company’s shares, totalling almost U$1 trillion if all milestones are met. These milestones include 12 market capitalization goals – starting at U$2 trillion and going up in increments of U$500 billion, with the last two increments of U$1 billion to a total of U$8.5 trillion – and 12 separate operational goals.
The vote does not guarantee a smooth passage for the major pay amount, however. More than 80% of votes were cast in favour of Musk’s U$56 billion pay performance award at a special general meeting in 2018, but it was voided by a Delaware judge last year who deemed it as “unfair” to shareholders, as reported by Minerva Analytics. This led to Tesla shifting its incorporation from Delaware to Texas in June 2024, with almost 87% of shareholders voting in favour of the decision. While almost 77% of shareholders voted to re-approve Musk’s 2018 performance-based stock option award, it was again rejected in December. This pattern could well be repeated for the U$1 trillion dollar pay package, especially due to its significantly higher amount.
“The approval of Musk’s pay package highlights an ongoing tension between performance-based remuneration and sound governance,” said Isobel-Mae Lacey, Research Analyst at Minerva Analytics. “The award remains one of the largest in corporate history, and while shareholders have clearly endorsed the outcomes delivered since its introduction, questions persist around proportionality and precedent.
“The 2018 pay package was designed to link reward directly to value creation, but its sheer magnitude raised concerns,” she added. “With shareholders now reaffirming their support for another large award, the resolution effectively strengthens Musk’s influence within Tesla, reinforcing the view that investors are prioritising continuity and vision over conventional pay restraint. From a remuneration perspective, the vote signals a willingness among investors to overlook scale and dilution concerns in favour of maintaining alignment with Musk’s ambitious growth narrative.”
The pay award was approved despite a slump in Tesla’s performance this year and controversy created by Musk causing both financial and reputational damage to the company. According to reports this week, Tesla sales have slumped in both the UK and Germany. EV sales in Germany dropped by more than half in October, while sales in both regions are reportedly down 50% year-to-date.
A recently released working paper from the National Bureau of Economic Research by Yale University economists found that Tesla’s US sales would have been between 67% and 83% higher, or about 1 million to 1.26 million additional vehicles, from October 2022 to April 2025, coinciding with the peak of his political involvement. This year alone Musk has been prominently involvement with the infamous US Department of Government Efficiency (DOGE), had a high-profile fallout and split from US President Donald Trump, attempted to meddle in political affairs abroad – including in Germany and the UK – and formed a new political party. The latter saw Tesla shareholders’ concerns piqued and calls for Tesla’s board to curb the activities of Musk following the launch of the America Party. However, it has not been an entirely bad year for Musk, who has reportedly become the first person to reach a net worth of U$500 billion.
Against this backdrop, several shareholders and other organisations had come out against the proposed pay package for Tesla’s polarising CEO ahead of the AGM. Norges Bank Investment Management (NBIM), the world’s largest sovereign wealth fund, this week joined the list of investors in announcing that they would be voting against the management proposal. “While we appreciate the significant value created under Musk’s visionary role, we are concerned about the total size of the award, dilution, and lack of mitigation of key person risk- consistent with our views on executive compensation,” NBIM reportedly said in a statement. The organisation has a stake of just over 1% in the EV manufacturer. NBIM last year voted against reinstating Musk’s U$56 billion pay deal after it had been rescinded by a US judge.
Last month, Tesla shareholders sent a letter urging fellow investors to vote against the pay package, as well as oppose the re-election of three directors- Ira Ehrenpreis, Joe Gebbia and Kathleen Wilson-Thompson – as reported by Minerva Analytics. The letter was sent by shareholders including New York City Comptroller Brad Lander on behalf of the New York City Employees’ Retirement System, the New York City Teachers’ Retirement System, and the New York City Board of Education Retirement System and Comptroller of Maryland Brooke E. Lierman. It was additionally signed by the State Treasurers of Colorado, Nevada and New Mexico, as well as SOC Investment Group and SHARE (Shareholder Association for Research and Education).
At the end of last month, advocacy organisation Majority Action also set out six key reasons for shareholders to vote against Musk’s highly controversial U$1 trillion pay package, as reported by Minerva Analytics. These reasons included the pay package potentially risking permanently “dilute[ing] shareholders’ ownership stakes” while potentially delivering solely short term gains, echoing NBIM’s concerns, as well as branding the pay package as being “completely divorced from any objective market benchmarks or sense of proportionality”.
Musk had repeatedly threated to quit the company if his pay package was not approved by shareholders and reportedly went as far as to hijack a recent call with investors to campaign for his pay package. Tesla Board Chair Robyn Denholm reportedly said that the company risks losing Musk if his pay package is not approved and urged shareholders to vote in favour of the proposal in a letter sent to investors.
“The package’s approval shows just how much investors still see Musk as inseparable from Tesla’s success,” said Karin Mikusova, Research Analyst at Minerva Analytics. “Even though the pay package is excessive, shareholders don’t seem too concerned. However, while it’s framed as aligning incentives with growth, it also strengthens Musk’s voting power and control over the company.”
The State Board of Administration of Florida Retirement System had also sent an exempt solicitation to other Tesla shareholders requesting that they vote in favour of the pay package, describing it as a “bold, performance-driven incentive structure”. It additionally argued that the 2025 plan “sets a new standard for executive compensation by demanding extraordinary results and reinforcing Tesla’s ambition to achieve unprecedented scale and impact in the industry”.
Ann Lipton, Professor at University of Colorado Law School, pointed out in a blog post this week that Schwab Asset Management had earlier this week pledged to back the Tesla pay proposal following several prominent retail shareholders said on social media that they would move funds out of brokerages that voted in opposition. “With the caveat that I am not exactly clear on what assets were involved, this is an interesting conundrum of fiduciary obligation and mutual fund voting,” said Lipton. “On the one hand, shouldn’t funds vote the way the investors want? On the other, Tesla stans are not the only investors in the fund, and if Schwab believes the pay package is bad for the fund overall, shouldn’t those other investors be protected?.”
She added: “I’m not sure I’m clear on what exactly happened here – if Schwab voted assets not based on the preferences of investors in the relevant funds, but based on the preferences of other clients, that seems to be clearly a violation of fiduciary duty.”
Sarah Wilson, CEO at Minerva Analytics, responded to Lipton’s post on LinkedIn, remarking that “if fiduciary duty really matters, we need to get to the bottom of what could be construed as, to put it bluntly, blackmail”. “Should fiduciaries be put in the position of facing mass client defections for doing what they genuinely believe is the right thing? Who’s the “terrorist” now? Have we entered the age of “weaponised democracy”? Quite possibly,” she added. “There’s a stunning hypocrisy here. If it’s a bad thing to have ESG boycotts, why is it a good thing to have governance boycotts? Radical free speech seems to be a one-way business in some quarters.”
Tesla faced eight shareholder proposals at its upcoming AGM, seven of which company management had recommended a vote against. During the 2025 shareholder meeting livestream, Brandon Ehrhart, General Counsel and Corporate Secretary at Tesla, preliminarily announced that “with respect to shareholder proposals 8 through 14, our shareholders have supported the recommendations of the Tesla board on all of them other than proposal 12”. Proposal 12 requested that the board take the steps necessary to de-classify the board, though the exact breakdown of the votes is yet to be announced.
The only shareholder resolution that a case-by-case recommendation has been issued for is to request the Board to authorise an investment in xAI, the AI startup founded by Musk in 2023. Musk has previously lobbied for Tesla to invest in xAI, in July commenting that “if it was up to me, Tesla would have invested in xAI long ago”. On proposal 7 requesting the Board to authorise an investment in xAI, Ehrhart said that “while we received more votes in favour than we did in against, there were a significant number of abstentions”. He added that “since this is an advisory vote, the board will examine the next steps in the light of this level of shareholder support”.
Regarding management proposals, in addition to approving the 2025 CEO performance award, preliminary voting results saw Ira Ehrenpreis, Joe Gebbia and Kathleen Wilson-Thompson elected as directors of the company, the approval of an advisory vote on the remuneration of the company’s named executive officers and the approval of the amendment and restatement of the 2019 Equity Incentive Plan. However, shareholders “ha[d] not approved” the amendment to the certificate of formation and the bylaws to eliminate applicable supermajority voting requirements according to Ehrhart’s comments.
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Last Updated: 7 November 2025