Tesla shareholders approve Elon Musk’s record $1 trillion pay package amid bold AI and robotics push

Tesla shareholders have approved an unprecedented $1 trillion compensation plan for CEO Elon Musk, solidifying his position at the center of the company’s future as it pivots toward autonomous vehicles and humanoid robots. The package, endorsed by more than 75 percent of voting shareholders during Tesla’s annual meeting on Thursday, represents the largest executive pay deal in corporate history, according to CNN and Fox Business.

The approval caps months of debate among investors and regulators over Musk’s influence within Tesla and his growing ambitions beyond electric vehicles. The plan, which could grant Musk as many as 423.7 million additional shares by 2035, depends on the company reaching a market valuation of $8.5 trillion and achieving a series of operational milestones. Tesla’s current valuation stands near $1.45 trillion.

Record-Breaking Compensation and Investor Reactions

The plan eclipses any previous executive compensation package, dwarfing Musk’s own $56 billion plan from 2018, which was voided earlier this year by a Delaware judge. That earlier decision spurred Tesla’s move to reincorporate in Texas. According to Wired, the $1 trillion package will take effect only if Tesla meets a series of ambitious targets, including delivering 20 million vehicles, deploying 1 million robotaxis and humanoid robots, and selling 10 million “Full Self-Driving” software subscriptions within a three-month period.

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In Austin, shareholders erupted in cheers when the results were announced. “I super appreciate it,” Musk said, thanking investors for their confidence. He added humorously that Tesla’s shareholder meetings “are bangers,” contrasting them with typical corporate gatherings. Tesla’s board chair, Robyn Denholm, said in a letter to shareholders that failure to approve the package could have cost the company its CEO. “If we fail to foster an environment that motivates Elon to achieve great things through an equitable pay-for-performance plan, we run the risk that he gives up his executive position,” she wrote, as reported by Fox Business.

Still, not all investors were persuaded. Norway’s sovereign wealth fund, the sixth-largest external Tesla investor, voted against the package, citing concerns about its size, dilution risk, and the company’s dependence on Musk. Proxy advisory firms ISS and Glass Lewis also recommended rejection, arguing the plan over-concentrates power in Musk’s hands. Despite these objections, 75 percent of shares voted in favor, securing Musk’s control and setting the stage for the company’s next strategic phase.

Litigation and Governance Challenges

The approval follows years of legal and governance controversies surrounding Musk’s previous pay structures and management approach. His 2018 package became the subject of a lawsuit in Delaware’s Chancery Court, where a shareholder alleged that Tesla’s board had failed to act independently. A final decision on that case is still pending on appeal. According to Wired, the dispute was one reason Tesla reincorporated in Texas earlier this year to distance itself from Delaware’s corporate law system.

Before Thursday’s vote, Musk argued that the new package was essential to maintain his commitment to Tesla, particularly as he pursues advanced AI and robotics projects. “If we build this robot army, do I have at least a strong influence over this robot army?” he said in a call with investors. “I don’t feel comfortable building that robot army unless I have a strong influence.” The remarks underscored his desire for significant voting control—though Musk added that his ownership should not be so high that he “can’t be fired if I go insane.”

Legal experts cited by CNN and Reuters have said the outcome could influence future corporate pay governance, as boards may look to balance the need to retain visionary leaders with shareholder protections. While the Delaware litigation could still affect final implementation, Tesla’s board has indicated confidence that the Texas incorporation and shareholder approval will secure the plan’s legitimacy.

Shift Toward AI, Robotics, and Chip Manufacturing

Much of the shareholder meeting focused less on electric vehicles and more on Tesla’s ambitions in robotics and artificial intelligence. Musk devoted large portions of his remarks to “Optimus,” Tesla’s humanoid robot, which he described as the company’s most promising product. He predicted that Optimus could “be better than the best human surgeon,” potentially “eliminate poverty,” and “increase the size of the economy by a factor of 10 or more,” as reported by Axios.

Musk said Tesla aims to produce the robot at a cost of about $20,000 per unit and believes every household could one day own one. Although the product remains in early development, Tesla has already demonstrated prototypes capable of simple movements. At Thursday’s meeting in Austin, Musk appeared onstage beside two dancing Optimus robots, jokingly telling the crowd, “Look at us, this is sick.”

To support its robotics and self-driving ambitions, Tesla plans to increase its investment in semiconductor design. Musk told shareholders that he expects Tesla will need to construct its own chip fabrication facility to meet demand for advanced, power-efficient processors. “I can’t see any other way to get to the volume of chips that we’re looking for,” he said. “I think we’re probably going to have to build a gigantic chip fab.”

According to Axios, Tesla currently designs custom chips and partners with Samsung and TSMC for production but may also collaborate with Intel in the future. Musk said the company is developing an in-house chip that would use “about a third of the power” of Nvidia’s Blackwell chip while matching its performance at under 10 percent of the cost. Analysts say the move would be highly unusual, given that advanced semiconductor fabrication is typically dominated by a few major suppliers. The proposed facility’s location and timeline have not been announced.

Autonomous Vehicles and Market Outlook

In addition to the robotics push, Musk confirmed that production of Tesla’s new driverless vehicle, the “Cybercab,” will begin in April 2026. The model, which lacks a steering wheel and pedals, will require federal regulatory approval before entering full service. According to Wired and CNN, Musk said the company will expand its experimental robotaxi operations to more U.S. cities, including Dallas, Las Vegas, Miami, and Phoenix. Tesla currently operates a limited invite-only robotaxi program in Austin with human safety riders.

Despite investor enthusiasm, Tesla’s financial performance this year has been mixed. Sales and profits fell sharply in the first half of 2025 amid declining U.S. subsidies for electric vehicles and rising competition in China and Europe. While Tesla’s stock has gained 17 percent year-to-date, shares dropped 3.5 percent on Thursday to $445.91, reflecting investor caution about the company’s high-risk targets and legal uncertainties, according to Fox Business.

Morningstar analyst Seth Goldstein told Wired that for Musk to unlock the full compensation, Tesla would need to dominate multiple industries simultaneously. “Tesla will have to be the market leader not just in the U.S., but also Europe and other regions,” he said. The company must succeed not only in vehicle production but also in software, robotics, and artificial intelligence to justify its valuation goals.

Political and Public Reaction

The approval has also drawn criticism from political figures. U.S. Senator Bernie Sanders posted on X that the package exemplifies economic inequality: “This is what oligarchy looks like,” he wrote, contrasting Musk’s windfall with cuts to public assistance programs. Critics argue that the scale of the award highlights the widening gap between executive compensation and worker wages in the technology sector.

Supporters of the plan contend that it aligns Musk’s incentives with shareholder returns, noting that none of the compensation vests unless Tesla achieves its aggressive milestones. “It’s pay-for-performance on a scale never seen before,” said Denholm during the meeting. Tesla’s board maintains that Musk’s leadership has delivered “extraordinary shareholder returns” since he took over in 2008, when the company was on the brink of collapse.

Outlook and Strategic Implications

Analysts say the vote reaffirms investor confidence in Musk’s long-term vision but also places Tesla under immense pressure to meet nearly impossible benchmarks. Achieving an $8.5 trillion valuation would require Tesla’s market capitalization to rise more than 460 percent—well beyond any automaker in history and roughly 70 percent higher than Nvidia’s current record valuation of $5 trillion, according to Bloomberg data cited by CNN.

Industry observers expect the next decade to test whether Tesla can successfully pivot from an electric-vehicle manufacturer to a diversified robotics and AI company. While Musk described robots as “the biggest product of all time,” analysts caution that profitability in emerging fields like humanoid automation remains speculative. Any delays in regulatory approval for autonomous vehicles or setbacks in chip development could slow progress toward Tesla’s targets.

For now, Musk appears energized by the renewed mandate. “We have an incredible future ahead,” he told shareholders in Austin. The coming years will determine whether that vision can translate into results—and whether Tesla can deliver on the most ambitious performance plan in corporate history.