Elon Musk wins historic $1 trillion pay deal from Tesla shareholders

Tesla shareholders have given their approval to CEO Elon Musk's unprecedented pay package that could reach nearly $1 trillion over the next ten years. According toBBC's coverage, the remarkable deal received support from 75% of voting shareholders during the company's annual meeting held in Austin, Texas, on Thursday, Nov. 6.

The announcement was met with thunderous applause from the audience, and Musk celebrated by dancing on stage to chants of his name. The Tesla board defended the massive package by arguing that losing Musk would be disastrous for the company. BBC reports that Musk, already the world's richest person, must achieve ambitious targets, including delivering 20 million vehicles and eventually raising Tesla's market value to $8.5 trillion to earn the full payout.

Details of the compensation structure

The payment plan consists of stock grants rather than traditional salary, asCNBC explains in its analysis of the deal. Under this arrangement, Musk will receive shares in 12 separate portions as Tesla reaches specific milestones over the coming decade. The first payment triggers when Tesla's market value hits $2 trillion, up from its current $1.54 trillion valuation.

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CNBC notes that subsequent portions require the company to grow by $500 billion increments up to $6.5 trillion, with the final two portions demanding $1 trillion increases each. This structure would increase Musk's ownership stake from approximately 13% to 25%, adding more than 423 million shares to his current holdings.

Path to becoming first trillionaire

AP News highlights that this approval could make Musk history's first trillionaire, though achieving this status won't come easily. The plan requires Musk to deliver one million humanoid robots and deploy them commercially while also securing 10 million subscriptions to Tesla's self-driving features.

According to AP News, Musk must overcome current challenges, including declining sales and market share losses, particularly in Europe, where recent data showed a 50% collapse in German sales. Despite opposition from major investors, including CalPERS and Norway's sovereign wealth fund, shareholders expressed continued faith in Musk's ability to replicate past successes.