Elon Musk’s latest Tesla payout could make him the world’s first trillionaire

Tesla shareholders have limited time to vote on whether to approve a surprise pay package for CEO Elon Musk that could pay him nearly $1 trillion in shares.

Musk could leave the company if shareholders reject the package, board chairman Robin Denholm warned in a letter to voters last week. Denholm said the salary offer is tied to high performance goals and is necessary to motivate Musk to continue his work.

Tesla will hold its annual meeting on Thursday. Shareholders have until 11:59 p.m. Wednesday to vote on the payout plan, which was unveiled by the board in September.

“If we fail to create an environment that encourages Elon to achieve great things through an equal pay-for-performance plan, we risk him leaving his executive position,” Denholm wrote in an Oct. 27 letter. “Tesla may be missing out on the time, talent and vision necessary to generate extraordinary shareholder returns.”

Norges Bank Investment Management, which manages revenue from Norway’s natural resources and is one of Tesla’s biggest investors, said on Tuesday 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 under Mr. Musk’s visionary role, we are concerned about the overall size of the award,” Norges Bank said in a statement. “We will continue to have constructive discussions with Tesla on these and other issues.”

Musk is already the world’s highest-paid CEO, with compensation that dwarfs that of Meta’s Mark Zuckerberg and Palantir Alexander Karp. Musk is also Tesla’s largest individual shareholder with about 13% of the shares, but has repeatedly said he wants more voting power in the company.

At an earnings call last month, Musk said he wanted a significant stake in the company as it moves toward artificial intelligence and continues to develop its humanoid robot, called Optimus.

“If we build this robot army, do I at least have a strong influence on the robot army?” Musk told analysts. “I don’t feel comfortable building this robot army if I don’t have at least a strong influence.”

If approved, the new pay plan would give Musk more than a 25% stake in the company for meeting certain goals. The first round is valued at $2-trillion for Tesla, which is currently valued at around $1.5 trillion.

The milestones gradually increase the value of the $8.5-trillion company and include product goals such as delivering 20 million vehicles, deploying 1 million robotics for commercial operations and achieving 10 million fully self-driving subscriptions.

In her letter, Denholm described the package as a “highly customized performance plan that aligns shareholder value and measurable business results with our CEO’s interests.”

Tesla is at a critical juncture as it banks on its future autonomous driving technology and relies less on its traditional electric vehicles after a year of rocketing sales, experts said.

Interest in electric vehicles has waned as the Trump administration cuts back on federal incentives to go electric and announces tough auto tariffs. Last month, Tesla’s quarterly profit fell 31% year over year.

Still, the company’s shares have risen more than 90% in the past 12 months, even after Musk created a crisis for the Tesla brand with his interim tenure in the White House. Shares were up more than 2% on Monday, days ahead of the voting deadline.

The board of directors said Musk is essential to Tesla’s operations and its transition to the power of artificial intelligence. They said the proposed salary plan is fair as it depends on the overall success of the company.

“Elon is only rewarded when he delivers exceptional 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-than-incentive activity goals.

Musk is known for over-promising, and has been exaggerating the capabilities of his autonomous technology for nearly a decade. He described self-driving cars as a “solved problem” in 2015, while the 2025 Robotics Tesla rollout in Austin, Texas tackled the problem.

The proposed salary plan could make Musk the world’s first trillionaire. Several groups, including unions, corporate watchdogs and proxy advisory firms, have publicly opposed the pay package.