Tesla Inc’s annual shareholder meeting is shaping up to be a referendum on Elon Musk himself, with a $1 trillion stock award at stake. This award could make Musk the world’s first trillionaire if he hits a series of ambitious goals that would turn Tesla into an $8.5 trillion company.
Key Points to Consider
- The proposal would give Musk the right to earn up to 304 million Tesla shares over the next decade
- To achieve this, Musk must:
- Sell 20 million cars annually
- Roll out a million robotaxis
- Deploy a million Optimus humanoid robots
A Pay Package That Redefines ‘All Or Nothing’
The proposal, first floated in 2018, has been re-ratified after a legal challenge. Tesla’s board, led by chair Robyn Denholm, argues that dangling a massive equity prize is the only way to keep Musk focused on the automaker rather than his side ventures, such as X, xAI, and SpaceX. Denholm warns that Musk could “walk away” if shareholders reject the deal.
Shareholders Torn Between Loyalty And Leverage
Not all shareholders are in favor of the package. The California Public Employees’ Retirement System (CalPERS) has voted against it, calling it “orders of magnitude” above peers and warning it would “further concentrate power in a single shareholder.” Proxy advisers ISS and Glass Lewis also oppose it, prompting Musk to brand them “corporate terrorists.” However, many retail shareholders are ready to support the package, seeing Musk’s outsized pay as symbolic of Tesla’s ambition.
Investor Takeaway
The vote underscores Tesla’s identity crisis - is it a carmaker, a robotics empire, or an Elon Musk personality cult? Investors betting on Tesla’s long-term story should remember that even if Musk wins his trillion-dollar jackpot, it only pays out if he can deliver on the biggest “if” in corporate history. With the company’s future hanging in the balance, one thing is certain: the outcome of this vote will have far-reaching consequences for Tesla and its investors.