On November 6, 2025, Tesla shareholders delivered a resounding vote of confidence in CEO Elon Musk, approving a colossal compensation package that could ultimately be worth as much as $1 trillion. This landmark deal, easily the largest in corporate history, has sparked intense debate across the business world, with supporters hailing it as a bet on innovation and critics warning of unprecedented risks to corporate governance and shareholder interests.
The numbers are staggering: Musk’s new package consists of a restricted stock grant of 423,743,904 shares—about 12% of Tesla’s adjusted share count. If all conditions are met, it would boost Musk’s total ownership to nearly 29% of the company, further cementing his outsized influence over the electric vehicle giant. Tesla’s annual meeting saw more than 75% of shareholders vote in favor, despite vocal opposition from major institutional investors and influential proxy advisory firms, including Institutional Shareholder Services and Glass Lewis, as reported by Bloomberg and DW.
“What we are about to embark upon is not merely a new chapter of the future of Tesla, but a whole new book,” Musk told an audience in Austin, Texas, flanked by dancing humanoid robots. “This really is going to be quite the story.” (DW)
The compensation package is not a blank check. It’s structured as a performance-based grant, divided into 12 tranches over the next decade. Musk will only receive each portion if Tesla hits a series of ambitious milestones. The most headline-grabbing target? Tesla’s market capitalization must soar from its current $1.5 trillion to at least $8.5 trillion. Other hurdles include delivering 20 million vehicles, acquiring 10 million paid Full Self-Driving (FSD) subscription customers, deploying one million robotaxis, selling one million humanoid robots, and earning up to $400 billion in core profit (DW, CNBC).
For each tranche, Musk must pay the current market value of $334.09 per share or accept a reduced number of shares. The structure means he only benefits if Tesla’s share price rises significantly above the grant price. Shares earned in the first five years can only be sold after 7.5 years, while those from the second half must be held for a full decade. This arrangement, Tesla’s board argues, is designed to “retain and incentivize” Musk for the long haul (Poole Thought Leadership).
Yet the deal is not without controversy. Glass Lewis and Institutional Shareholder Services, which advise institutional investors on corporate governance matters, urged shareholders to reject the package, calling it “excessive” and warning that it could dilute existing shareholders’ voting power. Some of Tesla’s largest investors, including Norway’s sovereign wealth fund, also voted against the plan, citing concerns it could decrease shareholder value (DW).
Opponents point to several risks. Issuing so many new shares dilutes the ownership and voting rights of non-executive shareholders, potentially undermining checks and balances within Tesla’s governance structure. With Musk’s stake approaching 30%, he gains even greater sway over decisions—including, ironically, his own future compensation. Critics also worry that the package could set a dangerous precedent, prompting other CEOs to demand similarly astronomical pay deals, regardless of long-term company performance (Poole Thought Leadership).
“Tesla’s board has already been criticized for a lack of independence, and Musk’s new pay package could exacerbate that problem,” noted Poole scholars. The risk is not just theoretical: If Musk falls short of the most ambitious targets, he could still walk away with a substantial payout, while Tesla absorbs the cost. Moreover, the deal does little to reduce Tesla’s tax burden, as U.S. companies can only deduct up to $1 million annually for executive pay.
Supporters, on the other hand, argue that tying Musk’s compensation to such stretch goals is a smart way to align his interests with those of shareholders. As Tesla Chair Robyn Denholm emphasized, the company’s future is inextricably linked to Musk’s vision and leadership. The board even warned that Musk might leave Tesla if the package was rejected—a prospect that may have swayed some undecided voters (DW).
For Musk himself, the vote marks another milestone in a career defined by audacity. Already the world’s richest person, he now has a shot at becoming the world’s first trillionaire—if, and only if, Tesla can deliver on its sky-high promises. Musk responded to the shareholder approval with his trademark bravado, making bold predictions about Tesla’s future. According to Bloomberg, he claimed that Tesla’s humanoid robot would soon progress from simple tasks, like handing out bags of candy, to performing surgery with “beyond human” levels of precision.
The optimism isn’t shared by all. Skeptics wonder how Tesla can achieve such lofty targets, especially given recent challenges. As of September 2025, Tesla had delivered just over 8 million vehicles—far short of the 20 million goal. The company has grappled with multiple recalls over the past year due to faulty parts, faced a sales slump in Europe (attributed in part to Musk’s political activities), and navigated the shifting regulatory landscape of the Trump administration, which has both supported and criticized electric vehicles in recent months (CNBC).
There’s also the matter of government support. Tesla has benefited from approximately $38 billion in government subsidies, according to one analysis cited by CNBC. The company’s relationship with Washington remains pivotal, with analysts expecting Tesla to benefit from new artificial intelligence-related incentives and government contracts. As Yahoo Finance reported in October, some believe the Trump administration may fast-track Tesla’s autonomous vehicle initiatives, aligning national priorities with Musk’s ambitions.
For rank-and-file employees and other companies, the deal is a case study in the power and peril of equity-based compensation. Stock grants can be a powerful motivator, but they come with risks. If Tesla’s value falls or targets are missed, the shares could be worth far less—or even become worthless. Employees must also navigate complex tax implications, as restricted stock is taxed at ordinary income rates upon vesting, and future gains are subject to capital gains taxes (Poole Thought Leadership).
As the dust settles, one thing is clear: Tesla’s shareholders have placed an enormous bet on Elon Musk’s vision and ability to deliver. Whether that gamble pays off remains to be seen, but the outcome will reverberate far beyond the walls of Tesla’s Fremont and Austin factories. The next decade promises to be a wild ride—for Musk, Tesla, and the entire corporate world watching from the sidelines.
