Tesla investors approve $1t pay deal for Elon Musk

Tesla shareholders have approved a compensation package for CEO Elon Musk that could reach US$1 trillion, making it the largest ever awarded to a corporate leader.

Over 75% of votes backed the plan at Tesla’s annual meeting, after a campaign by the board and Musk to gain support.

To access the full payout, Musk must meet targets including growing Tesla’s market value and achieving milestones in vehicle production, robotaxis, and robotics.

The plan could increase Musk’s stake in Tesla to at least 25% over the next decade, but he will only receive the full amount if Tesla’s value rises to US$8.5 trillion and operational targets are met.

The vote followed opposition from some key investors and proxy advisers, who cited the size of the package and potential shareholder dilution.

Musk’s previous compensation plan was struck down by a Delaware judge in 2024, prompting Tesla to move its incorporation to Texas and appeal the ruling.

Tesla shares fell less than 1% in postmarket trading after the announcement.

🔗 Source: Bloomberg

🧠 Food for thought

Implications, context, and why it matters.

Musk’s 12-tranche stock award tied to ambitious valuation and operating goals

The plan grants 12 tranches of stock options tied to strict targets, with payouts vesting as hurdles are hit 1. If all vest and are exercised, Musk’s stake could move near 25% 1.
Tesla needs market value goals and operating milestones for the full payout. It says a paid robotaxi service is live in Austin and aims to reach about half of the U.S. by late 2025, subject to regulators 2.
Issuing more shares can dilute holders under this tranche plan 1. Norway’s sovereign wealth fund opposed the deal over size, dilution, and key person risk 1. Backers say pay rises only with gains for investors 1.

AI suppliers eye Tesla’s Dojo and compute buildout

Tesla expects Dojo 2, its next in-house supercomputer for training autonomous driving AI models, to run at scale next year and targets volume production of the AI5 chip near year-end 2. Total capital expenditure (CapEx) could top $9 billion in 2025 with spend on AI projects and compute gear 2.
Dojo trains neural networks on huge video sets 3. Musk plans about a 10x jump in model parameters 2. Suppliers can track Tesla’s AI spending path, including chipmakers, liquid-cooling firms, and power-delivery vendors.
Musk pegs Cybercab costs under $0.30 per mile over time, versus above $0.50 for today’s fleet 2. Hitting that at scale needs better inference efficiency. That lifts demand for edge compute, sensors, and low-latency links.