Tesla shareholders on Thursday approved a whopping $1 trillion compensation plan for CEO Elon Musk, awarding the world’s richest person the largest corporate payout in history. Musk will be eligible for the pay package if he meets the goals set by the electric vehicle company earlier this year.
Several high-profile investors have opposed the package in the past. Hence, its approval indicates that shareholders still believe Musk can lead automakers in an era dominated by robotics and artificial intelligence. According to The Guardian, the voting results were announced at the annual shareholder event in Austin, Texas, on Thursday.
As per the report, more than 75 per cent of investors voted in favour of Musk’s pay package. Not only this, “Elon” chants broke out in the room upon news of its approval. “Thanks, guys,” Musk said, after briefly dancing on stage alongside the company’s Optimus robots.
At the meeting, Musk described the Optimus robots, which have not yet entered mass production, as the future of the company and humanity. He reiterated his claim that the robot would be “the biggest product of all time” and suggested they could be used in everything from healthcare to prisons.
“You now get a free Optimus and it’s just going to follow you around and stop you from committing a crime,” Musk said. “You don’t have to put people in prisons and stuff. It’s really wild to think of the possibilities.”
Why it matters
In the past, Musk has said he wanted the pay package to gain more control over the company and to exert “strong influence over this robot army” he vowed to build as the company branches into robotics. The billionaire’s staggering compensation, if he met his goals, would be comparable to the GDP of entire countries, exceeding that of Ireland, Sweden, and Argentina.
Not only this, it vastly exceeds federal funding for entire government programs, such as the annual cost of SNAP food benefits, and dwarfs that of other tech moguls, such as Mark Zuckerberg. Critics of the package, including some prominent Tesla investors, argued that awarding Musk concentrated power in a single, erratic leader ignored the challenges the company has faced under Musk’s leadership.
“Elon Musk just got $1 trillion for failure. Sales are down, safety risks are up, and his politics are driving customers away. This isn’t leadership – it’s the world’s most expensive participation trophy,” the protest group Tesla Takedown said in a statement. If Musk manages to deliver the lofty milestones in the pay package laid out at the annual meeting, he could become the world’s first trillionaire.
These conditions include guiding Tesla to $8.5 trillion in market capitalisation, eight times its current market capitalisation. He would also be required to deploy millions of autonomous vehicles and humanoid robots, and sustain the company’s bottom line in the hundreds of billions over the next decade. Not only this, the billionaire would also have to help develop a long-term succession plan for the company he has led for more than 20 years.
