Tesla Pay Packages: Elon Musk's Future is Being Voted On

On Thursday, Tesla shareholders will make decisions regarding a massive compensation package aimed at giving Elon Musk sufficient time to achieve some revolutionary advancements in the technology field.

Musk speaks proudly about how Tesla's engineering expertise in artificial intelligence, autonomy, and robotics will surpass rival tech giants. This unique package, based on performance-related requirements, could see Musk's earnings soar to $1 trillion.

Tesla Chairwoman Robin Denholm has appeared on CNBC and other outlets to advocate for this plan, demonstrating their ongoing support for Musk. This support continues despite criticisms that Musk’s close associations with far-right political figures have negatively impacted sales. In a message dated October 27, Denholm emphasized this situation by stating, "Without Elon, Tesla could face significant value loss. Because our company may not remain valuable in pursuit of redesigning the fundamental building blocks of mobility, energy, and workforce."

Musk has indicated that he might leave Tesla or take a more backseat role if his stock is not increased. This package is projected to allow Musk to increase his Tesla shares from over 12% to above 25%.

Musk stated in a conference call, "I'm not going to spend that money. I just want to have at least a strong influence over it if we build this robot army." The outcome of the vote is expected to be announced at Tesla's annual shareholder meeting at the Gigafactory in Austin, Texas, on Thursday.

Protesters against Musk are planning a demonstration in front of the Tesla Gigafactory that day. During a recent protest in Austin, activist Ethan McBride remarked, "A trillion dollars is way too much for any one person, regardless of the circumstances," describing this package as a tool to enrich someone who undermines our democracy.

While Musk's net worth exceeds $500 billion, he is currently the richest person in the world according to Forbes’s real-time billionaire list. To receive the full compensation package, Tesla must reach 12 key milestones in its market valuation. The first tranche will be issued if Tesla's market value reaches $2 trillion.

The package is also tied to certain operational profit and product targets, such as delivering 20 million Tesla vehicles. This package aims to ensure Musk stays with Tesla for at least seven and a half years.

Musk has defined Tesla's potential growth as virtually limitless, stating in July, "Tesla will be the most valuable company in the world." While Musk's successes in Tesla, SpaceX, and other ventures have inspired many people, critics argue that the company has been slow in introducing new models and that Musk often steps back when confronted with challenging goals or fails to deliver.

The compensation proposal has faced criticism from advisory firms such as Glass Lewis and Institutional Shareholder Services (ISS). An ISS analysis dated October 17 criticized the justification for the potential earnings, stating that Musk's financial interests are already closely tied to Tesla's future. It noted that the unique structure of the package might eliminate the necessity of achieving all the targets due to its unprecedented value.

Norway's sovereign fund, one of the top 10 shareholders of Tesla, announced this week that it would vote against the package. Norges Bank Investment Management stated on its official website, "While we appreciate the significant value created under Musk's visionary role, we express our concerns regarding the overall size of the award, dilution, and the lack of management over key person risks."

Others voting against the package include New York State Comptroller Thomas DiNapoli. Florida state officials have described the package as a "gold standard" for executive compensation, referencing Musk's record in value creation.