For Tesla’s board and many investors, CEO Elon Musk and Tesla’s success are closely linked. Now that a vote on a record-setting pay package for Musk is settled, the bulls are crowing and the naysayers are alarmed.
On Thursday, 75% of Tesla shareholders voted to approve Musk’s proposed $1 trillion CEO pay package, contingent on meeting specific performance metrics over the next decade.
“What we’re about to embark upon is not merely a new chapter of the future of Tesla, but a whole new book,” Musk said on the neon-lit stage after the vote, while an Optimus robot danced behind him.
Tesla’s stock rose 2% after hours following the vote. The company posted on X, “We love y’all.”
Here’s how analysts and investors reacted to the shareholder approval of Musk’s $1 trillion pay package.
In support of the package
Tesla’s bulls were elated by the vote’s outcome.
Wedbush analyst Dan Ives said that the vote cements Musk as a “wartime CEO” who will lead Tesla through an AI revolution.
“With this pay package now voted positively, keeping Tesla’s biggest asset, Musk, as its leader for the foreseeable future, we continue to believe that the AI valuation is getting unlocked,” he wrote in a note on Thursday.
Ives highlighted that the $1 trillion pay package is no sure thing.
“There are significant hurdles that TSLA must achieve to unlock this pay package, including 20 million vehicle deliveries, 10 million active FSD subscriptions, 1 million Optimus robot deliveries and 1 million robotaxis in commercial operation,” he wrote.
Gene Munster, a veteran Tesla analyst and managing partner at Deepwater Asset Management, said that the vote was a win for Tesla investors for two reasons.
“First, it gives Elon the control and financial carrot he wanted, which means he will stay engaged at Tesla,” he wrote in a blog post on Thursday.
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And second: “Investors sent a message to Elon: we are with you. That means when Tesla has a rough quarter, the stock likely won’t get punished as much as expected.”
Tesla
Against the package
Investors and an EV watch group said the outcome was a show of poor accountability and reduced independence at the company.
SOC Investment Group, an investor consortium that urged stockholders to vote against the pay plan, said Thursday’s vote reaffirms the “deep concerns” shareholders have about Tesla’s corporate governance.
“Musk’s outsized influence at Tesla is on full display,” the group said in a Thursday statement. “From paid social media campaigns and TV advertisements to hiring a consultant to conduct proxy solicitations, Tesla took extraordinary measures to set up this vote in Musk’s favor.”
It added: “True innovation and growth at the company must be guided by strong governance, independent oversight, and transparent accountability—not by throwing money at the problem and concentrating more power in the hands of a single executive.”
The New York State Comptroller, which holds shares in Tesla through the New York State Common Retirement Fund, wrote that Tesla’s governance has drifted away from accountability.
“This is pay for unchecked power, not pay for performance,” New York state comptroller Thomas DiNapoli said in a statement on Thursday.
“The board has rewarded distraction and entrenched a CEO who answers to no one,” he added.
Industry watchdog Safe Autonomous Vehicles Everywhere said it was alarmed by the vote’s outcome.
“Autonomous vehicles can potentially save lives and be a transformative technology, but only if they’re deployed responsibly,” Shua Sanchez, the national campaign director at SAVE, told Business Insider in a statement.
“This pay plan creates a dangerous financial incentive to rush partially-autonomous vehicles and robotaxis onto public roads before they’re proven safe. Nothing in this pay plan incentivizes safety,” he added.
