Tesla shareholders overwhelmingly approved a controversial pay package for CEO Elon Musk during a meeting held on Thursday at the company’s Austin, Texas factory. Over 75% of participating shareholders approved the measure. This move could put Musk on the path to receiving hundreds of billions of dollars and far greater voting control over the EV maker.
Currently, Musk owns about 15% of Tesla. He’s made no secret that he’d like to increase his reach to the tune of 25%. He’s even threatened to walk out on the company if his wishes aren’t fulfilled. His approval of the pay package is a smart strategic step toward that bigger goal.
Just earlier this year, Tesla showered Musk with $29 billion in stock. This allocation might be short-lived, as it could be cancelled out if the company is successful in its current appeal of that decision. Musk had argued that getting the pay package approved had been the easiest way to strengthen his voting power inside of Tesla.
In his address to investors this past week, Musk sounded an optimistic tone on what’s to come. He promised, “What we’re about to dive into is not just a new chapter of Tesla, but an entirely new book.” His comments drew the approval of shareholders, who erupted with chants of his name in approval.
The agreed pay package will be disbursed in 12 staggered payments. Each tranche is linked to separate operational, adjusted profit, and market capitalization targets. If Tesla is able to achieve these milestones, Musk would earn those shares, making his long-term ownership of the company even more secure. Given the financial incentives associated with this deal, it’s likely that Musk would end up with 3/4ths of Tesla’s equity.
Robyn Denholm, Chairwoman of Tesla, addressed the gathering, despite having lost some of her voice prior to her speech. She added, “This is a pivotal moment for Tesla and I think I’ve said that 3,000 times over the last few weeks and this past year has been very instrumental in our company’s history.” Her remarks highlighted just how historic this moment is, not only for the company but its new executive leadership as well.
That drive for shareholder approval came on the heels of two months’ worth of significant campaigning by Tesla’s board of directors and a vast number of executives. To push growth and profitability, the company wanted to tightly link shareholder interests with Musk’s long-term vision.
During the meeting, Musk stood flanked by dancing Optimus robots, a visual representation of Tesla’s innovative approach and future aspirations. The move was part of a broader spectacle designed to help calm investor jitters about the company’s long-term direction while building momentum for the pay package.