Tesla shareholders supported a nearly $1 trillion compensation plan for the company's CEO Elon Musk. The voting results were announced at the company's annual shareholder meeting in Austin.
The shareholders' decision does not mean that Musk will receive the money immediately.
The compensation package will consist of 12 tranches of stock, which Musk must earn by meeting certain conditions. If all conditions are met over the next decade, his stake in the company will increase from about 13% to 25%, growing by 423 million shares.
Musk will receive the first tranche if Tesla reaches a market capitalization of $2 trillion. It currently stands at $1.54 trillion.
The next nine tranches will be awarded for each $500 billion increase in capitalization, while the last two will require a step of $1 trillion. This means that for Musk to receive the full package, the company's value must reach $8.5 trillion.
Additionally, profit targets have been set, starting at $50 billion per year. For comparison, in the third quarter, Tesla reported adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of $4.2 billion.
The plan also outlines non-financial conditions: 20 million cars sold, 10 million active subscriptions to Full Self-Driving (FSD), 1 million Optimus robots, and 1 million robotaxis in commercial operation.
Not all Tesla shareholders supported this compensation package. Among those who opposed it were the largest U.S. public pension fund CalPERS, Norway's sovereign fund, and corporate governance advisors Glass Lewis and ISS.
After the results were announced, Musk thanked investors, saying, "Fantastic group of shareholders. Hold your Tesla stock!" and referred to critics as "corporate terrorists."
