Elon Musk turned off many potential buyers of his Tesla cars and sent sales plunging with his foray into politics. However, the stock has soared anyway, and now he wants the company to pay him more — a substantial amount.
Shareholders gathering Thursday for Tesla’s annual meeting in Austin, Texas, will decide in a proxy vote whether to grant Musk, the company’s CEO and already the wealthiest person in the world, enough stock to potentially make him history’s first trillionaire.
It’s a vote that has sparked heated debate on both sides of the issue, even drawing the pope’s comments on it as an example of income inequality.
Several pension funds have come out against the package, arguing that the board of directors is too beholden to Musk, his behaviour too reckless lately, and the riches offered too much.
Supporters say Musk is a genius who is the only person capable of ushering in a Tesla-dominated future in which hundreds of thousands of self-driving Tesla cars — many without steering wheels — will ferry people.
Humanoid Tesla robots will march around factories and homes, picking up boxes and watering plants. The pay is necessary to incentivize him, they say, and keep him focused.
Musk has threatened to walk away from the company if he doesn’t get what he wants and has blasted some of the package’s critics as “corporate terrorists.”
What Is Up For A Vote
To get his Tesla shares, Musk has to secure approval from a majority of the company’s voting shareholders. Improving the odds, Musk gets to vote his own shares, worth 15% of the company.
Shareholders first heard about the pay package in September when the board of directors proposed it in a detailed filing to federal securities regulators.
The document, running 200 pages, also contains other proposals up for a vote at the meeting, including whether to allow Tesla to invest in another Musk company, xAI, and who should serve on the board in the future.
How Musk Can Get $1 Trillion
Musk won’t necessarily get all of that money, or even a cent of it, if the package is approved. He first has to meet several operational and financial targets.
To receive the full payment, for instance, he must deliver 20 million Teslas to the car market over 10 years, more than double the number he has produced over the past decade. He also has to significantly increase the market value of the company and its operating profits, and deliver one million robots from zero today.
If he falls short of the biggest goals, though, the package could still hand him plenty of money.
Musk will get $50 billion in additional Tesla shares, for example, if he increases the company’s market value by 80%, something he did just this past year, as well as doubling vehicle sales and tripling operating earnings, or hitting any other two of a dozen operational targets.
Musk vs. Rockefeller
Musk is already the wealthiest man in the world, with a net worth of $493 billion, according to Forbes magazine, and is well ahead of some of the richest individuals of years past.
The steel giant Andrew Carnegie was once worth an inflation-adjusted $300 billion, according to the Carnegie Corporation, which is well below Musk’s wealth.
Musk is still trailing John D. Rockefeller, but he’s closing in fast. The railroad titan hit peak inflation-adjusted wealth of $630 billion in 1913, according to Guinness World Records.
For his part, Musk says it’s not really about the money, but about acquiring a higher stake in Tesla — it will double to nearly 30% — so he can control the company. He says that’s a pressing concern, given Tesla’s future “robot army,” a reference to the company’s Optimus humanoid workers, which he doesn’t trust anyone else to control.
Split Among Shareholders
Many investors have come out in support of the package, including Baron Capital Management, whose founder called Musk indispensable to the company. “Without his relentless drive and uncompromising standards,” wrote founder Ron Baron, “there would be no Tesla.”
Critics include the largest U.S. public pension fund, CalPERS, and Norway’s sovereign wealth fund, the world’s largest. They argue the pay is excessive, with the Norway fund expressing concern that the board that designed it, which includes Musk’s brother, is not independent enough.
That echoes a decision from a Delaware court nearly two years ago, which blasted the process for approving a previous Musk pay package as “deeply flawed,” given his “extensive ties” to the directors.
Even the Vatican has weighed in, decrying the global wealth gap and criticizing the trillion-dollar offer in particular.
“If that is the only thing that has value anymore,” said Pope Leo XIV, “then we’re in big trouble.”
