Tesla shareholders have approved a record-breaking pay package for CEO Elon Musk that could be worth nearly $1 trillion (£760 billion).
The unprecedented deal was given the nod by 75% of shareholders who voted at the firm's annual general meeting on Thursday.
The arrangement mandates Musk, already the world's richest man, to substantially elevate the electric car maker's market value over the coming years. If he meets various performance targets, he stands to gain hundreds of millions of new shares.
The magnitude of this deal has incited controversy, yet the Tesla board asserted that losing Musk would pose a significant risk for the company. They emphasized that his leadership is crucial for Tesla's growth.
The announcement drew loud applause from the audience at the Austin, Texas meeting, where Musk celebrated on stage amid chants of his name. What we're about to embark upon is not merely a new chapter of the future of Tesla, but a whole new book, Musk declared, indicating a shift in focus for the company.
To achieve the ambitious targets set out in the agreement, Musk will need to increase Tesla's market valuation from $1.4 trillion to an astounding $8.5 trillion and deploy one million self-driving 'Robotaxi' vehicles.
However, analysts have noted that Musk’s early comments during the meeting did not emphasize the electric vehicle segment or the self-driving technology, hinting instead at an ambition centered around Tesla's Optimus robot project.
Gene Munster, a managing partner at Deepwater Asset Management, highlighted a perceived misalignment with investor expectations, suggesting that Musk's vision may not prioritize the company's core vehicle offerings at this time.
During the session, Musk did reference full-self-driving (FSD), suggesting that the company is nearing confidence in allowing drivers to engage in distracting behaviors like texting while driving. This statement, aligned with current scrutiny from U.S. regulators over Tesla’s self-driving features due to safety concerns, could prove contentious.
In light of the potential benefits and pitfalls of Musk’s new compensation structure, ongoing discussions about corporate accountability and stakeholder interests remain crucial in defining the future of Tesla and its leadership.
