Tesla shareholders have limited time to vote on whether to approve an astronomical compensation package for CEO Elon Musk that could award him nearly $1 trillion in stock.
Musk could leave the company if shareholders reject the package, board chairwoman Robyn Denholm warned in a letter to voters last week. The salary proposal is tied to ambitious performance goals and is necessary to incentivize Musk to continue his work, Denholm said.
Tesla will hold its annual meeting on Thursday. Shareholders have until 11:59 p.m. ET Wednesday to vote on the compensation plan, which was unveiled by the board in September.
“If we fail to foster an environment that motivates Elon to achieve great things through a fair performance-based compensation plan, we run the risk that he will abandon his leadership position,” Denholm wrote in an Oct. 27 letter. “Tesla could be wasting time, talent and vision, which have been essential to generating extraordinary returns for shareholders.”
Norges Bank Investment Management, which manages revenues from Norwegian natural resources and is one of Tesla’s largest investors, announced Tuesday that it would vote against Musk’s proposed salary. The fund holds a 1.16% stake in the company.
“While we appreciate the significant value created through Mr. Musk’s visionary role, we are concerned about the total amount of this award,” the Norwegian bank said in a statement. “We will continue to seek constructive dialogue with Tesla on this and other topics.”
Musk is already among the highest-paid executives in the world, with compensation that eclipses that of Meta’s Mark Zuckerberg and Palantir’s Alexander Karp. Musk is also Tesla’s largest individual shareholder with about 13% of the stock, but has repeatedly said he would like more voting power over the company.
During an earnings conference call last month, Musk said he wanted a significant stake in the company as it moves into artificial intelligence and continues to develop its humanoid robot, dubbed Optimus.
“If we build this robot army, do I at least have a strong influence on this robot army? Musk told analysts. “I don’t feel comfortable building this robot army if I don’t have at least some strong influence.”
If approved, the new compensation plan would give Musk more than 25% of the company’s equity for achieving specific milestones. The first step is to reach a $2 trillion valuation for Tesla, which is currently valued at around $1.5 trillion.
The milestones gradually increase to a company valuation of $8.5 trillion and also include product goals, such as delivering 20 million vehicles, deploying 1 million robo-taxis for commercial operation and obtaining 10 million full autonomous driving subscriptions.
In his letter, Denholm described the package as “a highly personalized performance plan that aligns shareholder value and measurable business results with the interests of our CEO.”
Tesla is at a turning point as it stakes its future on self-driving technology and becomes less dependent on its traditional electric vehicles after a year of difficult sales, experts say.
Interest in electric vehicles is waning as the Trump administration attacks federal incentives to go electric and declares high auto tariffs. Last month, Tesla’s quarterly profit plunged 31% year-over-year.
Yet the company’s shares are up more than 90% in the past 12 months, even after Musk sparked a Tesla brand crisis with his temporary stint in the White House. Shares rose more than 2% on Monday, days before the voting deadline.
Musk is critical to Tesla’s operations and its transition to an artificial intelligence powerhouse, the board said. The proposed compensation plan is fair because it depends on the overall success of the company, they said.
“Elon is only rewarded if and when he achieves extraordinary performance that benefits all Tesla shareholders,” Denholm wrote in October.
A Reuters analysis found that Musk could pocket more than $50 billion by meeting just a few of the board’s less ambitious performance goals.
Musk is known for overpromising and exaggerating the capabilities of his autonomous technology for nearly a decade. He described self-driving cars as a “solved problem” in 2015, even though the 2025 rollout of the Tesla robotaxis in Austin, Texas, has run into problems.
The proposed compensation plan could make Musk the world’s first billionaire. Several groups, including unions, business watchdogs and proxy advisory firms, have publicly opposed the wage plan.
