Tesla $1 Trillion Musk Pay Deal Approved Amid Controversy

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Background: The Old Package and the New Conflict cc

Tesla awarded Musk a large compensation package in 2018. That package was worth $56 billion, but the Delaware court invalidated it, citing that the board did not make the decision properly. Musk appealed, and the case is currently pending in the Supreme Court. Now, a new package has emerged. Tesla presented it in September 2025. Musk demanded it; he wanted 25 percent of the voting power. Previously, he held 13 percent. This package focuses on AI and robotics, and Musk also runs xAI, SpaceX, and Neuralink. His political activities are a subject of discussion.

He is a supporter of Donald Trump and advocates for reduced federal spending. However, these actions are harming Tesla’s sales. According to a paper from the National Bureau of Economic Research, Musk’s political activism reduced Tesla’s US sales by 67 to 83 percent between October 2022 and April 2025. There are also problems in Europe; sales in Germany fell by 50 percent last month. Despite this, shareholders trust Musk; they call him the “miracle man” for saving Tesla from bankruptcy. The company is now valued at $1.54 trillion.

Understanding the Package in Tesla Musk $1 Trillion Pay Deal

This package is based on stock options. There are 12 tranches. Shares will be awarded in each tranche if Musk achieves the targets. The timeframe is 10 years. The total value is $1 trillion. Musk will receive over 423 million shares, increasing his ownership to 25 percent. What are the targets? Market capitalization. The first tranche is at $2 trillion, then at intervals of $500 billion, up to a total of $8.5 trillion. Earnings targets include annual adjusted profit ranging from $50 billion to $400 billion.

EBITDA in the third quarter was $4.2 billion. Operational targets include delivering 20 million vehicles. There are currently over 8 million. 10 million active FSD subscriptions. 1 million Optimus bots delivered. 1 million Robotaxis operating. FSD stands for Full Self-Driving. It will be an unsupervised system, Musk says. Optimus robots will end poverty. Provide better medical care but will have a bigger impact than cell phones. Help with crime control. But not a single Optimus is on the market yet. Timeline unclear.

How the voting happened and what the results were:

Tesla’s annual shareholder meeting took place. In Austin. November 6, 2025. Musk was on stage. At the Gigafactory. Shareholders cast their votes. Over 75 percent approved. In voting shares. The board recommended approval, but proxy advisors opposed it. Glass Lewis and ISS. They said the package was excessive. The board is too close to Musk. Another proposal came up. From Stephen Hawk. That Tesla invest in xAI. This also passed. But with many abstentions. Tesla will consider it. Another proposal was rejected. To make shareholder lawsuits easier. To lower the 3 percent ownership threshold. Shareholders refused. Musk said shareholders are fantastic. Hold Tesla stock. After the vote, the share price went up. Then closed at $445.44. No change.

Reactions: Supporters and Critics of Tesla Musk $1 Trillion Pay Deal

Musk celebrated. Called it a ‘resounding victory’. Said it’s for power, not money. To control the dangers of robots. Analyst Dan Ives praised it. Said it’s a win for shareholders. Musk is essential for the AI future. But there was also criticism. CalPERS and Norway’s sovereign fund opposed it. Musk called ISS and Glass Lewis ‘corporate terrorists’. Analyst Sam Abuelsamid called it ‘absurd’. Questions about the board. Despite being very close to Musk, his behavior is risky. Sales have fallen due to politics. The package is excessive considering his current wealth. Musk’s net worth is $493 billion, according to Forbes.

Why the Controversy and Debate?

There are several controversies. First, the size of the package: $1 trillion. The largest in history, exceeding John D. Rockefeller’s $630 billion (in today’s value). Second, Musk’s politics: Trump support, conspiracy theories. This has driven away buyers. Sales have crashed in Europe. Third, the independence of the board. Musk’s brother, Kimbal, is on the board. Payments to friends. Governance issues led to the 2018 package being overturned by the court. An appeal is pending. Furthermore, the new package has no time commitment and no restrictions on political activity. An NBER paper states that sales losses are due to Musk. Fourth, the targets are ambitious, but payment is also given for partial success. ‘Covered events’ make it easy. Critics say this will encourage risky management. Tesla’s challenges: sales are down, market share is low, profits are down, and competition is intense.

What is the Impact on Tesla and Musk?

This approval empowers Musk. 25 percent voting power. Control over AI transformation, self-driving cars without steering wheels, robots everywhere. It will make Tesla an AI leader, a robot army of 1 million bots. Shareholders benefit, and Musk is motivated. But there are risks. If the targets are not met, confidence will fall. Musk could become the first trillionaire in history. But Tesla is struggling: sales are down, profits are low, and politics are having an impact. He could invest in his company xAI, linking it to Musk’s other ventures: SpaceX and Neuralink are strong, but the focus is divided. The share price is stable, but long-term growth is questionable. An $8.5 trillion valuation, 20 million cars – is it possible? Musk says yes. Yes

A glimpse into the future: What will happen next?

The next 10 years are crucial. The first target is a $2 trillion market cap. This can be achieved quickly. Then a $500 billion increment. Earnings of $400 billion. Vehicle deliveries will double. Bots and robotaxi launch. FSD subscriptions reach 10 million, and the 2018 appeal decision is coming. What if they lose? Will the new package be affected? Considering investment in xAI.

Musk will continue in politics. A role in the Trump administration? A boost for Tesla. But a backlash in Europe, although if successful, Musk becomes a trillionaire. Tesla becomes an AI giant. Failure would raise questions. Management changes? Shareholders unhappy. Musk says robots will change the world. End poverty. Medical revolution. Crime control. But it’s still a dream. Reality is far away, yet Tesla needs growth. The EV market is competitive. China and Europe are challenges. Musk’s leadership is tested. Shareholder confidence is strong. But the risks are high. Let’s see what happens.