Tesla shareholders are set to decide on Thursday whether to approve a proposed pay package for Chief Executive Elon Musk that could reach an unprecedented $878 billion, a sum that would make it the richest executive compensation deal in history. The annual general meeting, taking place at the company’s factory in Austin, Texas, will also include votes on key corporate governance reforms and a potential investment in Musk’s artificial intelligence startup, xAI, Reuters reported.
The proposed pay plan ties Musk’s compensation to extremely ambitious targets, including delivering 20 million vehicles over the next decade and putting one million robotaxis on the road, along with Tesla stock hitting new valuation milestones starting from $2 trillion up to $8.5 trillion. Passage of the plan would signal strong shareholder confidence in Musk’s vision of transforming Tesla into a leader not just in electric vehicles but also in AI and robotics. Some major investors, however, including Norway’s sovereign wealth fund, have criticized the proposal as excessive. Analysts note that the vote is likely to pass given Musk’s ability to vote his roughly 15% stake.
Shareholders will also consider a proposal for Tesla to invest in xAI, Musk’s AI company. While Musk has publicly supported the idea, the board has not endorsed it, leaving investors to weigh potential benefits against concerns over conflicts of interest between Tesla and Musk’s other ventures.
Other items on the agenda include a vote to eliminate Tesla’s supermajority voting requirement in favor of a simple majority standard. Previous attempts to scrap the supermajority rule in 2019, 2021, and 2022 fell short, and investors are divided over whether the change would strengthen or undermine Musk’s influence over the company. Shareholders will also vote on a proposal to adopt a formal political neutrality policy, which would bar the company and its executives from engaging in partisan political activity. Tesla’s board opposes the measure, citing existing policies that already ensure disclosure and accountability.
The outcomes of Thursday’s votes will provide a window into how far investors are willing to go in shaping Tesla’s corporate governance and corporate strategy while balancing Musk’s outsized role in the company. Reuters noted that the decisions could have long-term implications for both Tesla’s market trajectory and Musk’s broader ambitions in AI and robotics.
