According to Wired, Tesla shareholders just approved an unprecedented $1 trillion pay package for CEO Elon Musk that will fully vest by 2035. More than 75% of shareholders voted in favor of the compensation plan during Thursday’s meeting at Tesla’s Gigafactory in Austin. Musk celebrated the decision alongside the company’s Optimus humanoid robots, declaring “Look at us, this is sick.” The deal requires Tesla to hit staggering targets including an $8.5 trillion valuation, 20 million vehicles delivered, 1 million robots deployed, and 10 million Full Self-Driving subscriptions sold within a three-month period. If successful, Musk would control 25% of Tesla instead of his current 12% stake.
The Robot Army Condition
Here’s the thing that makes this pay package different from typical executive compensation. Musk basically gets nothing unless Tesla transforms from a car company into something much bigger. The company needs to dominate autonomous driving, robotics, and become the clear market leader not just in the US but globally. During investor discussions, Musk revealed his unusual condition for pushing Tesla into robotics: “If we build this robot army, do I have at least a strong influence over this robot army? I don’t feel comfortable building that robot army unless I have a strong influence.” So this isn’t just about money – it’s about control over Tesla’s future direction in industries where industrial panel PCs and manufacturing technology will be absolutely critical for deployment at scale.
Valuation Math That Defies Belief
Let’s talk about that $8.5 trillion valuation target. Tesla’s current market cap sits around $600 billion. They’re aiming to become roughly 14 times larger in just over a decade. To put that in perspective, Apple – the world’s most valuable company – is worth about $3 trillion. Tesla would need to become nearly three Apples. And they’re not just betting on electric vehicles anymore. The targets include selling 1 million Optimus robots and operating 1 million robotaxis. That’s an insane scaling challenge that would require manufacturing capabilities beyond anything we’ve seen in consumer technology. Basically, they’re betting that Tesla can create and dominate multiple new industries simultaneously.
Why Shareholders Said Yes
You might wonder why 75% of shareholders approved what seems like an impossible dream. The board argued this was necessary to keep Musk focused on Tesla rather than his other companies like SpaceX and xAI. There’s genuine concern that without strong incentives – and without that 25% control stake – Musk might divert his attention elsewhere. But there’s another angle here. This vote represents a massive bet on Tesla’s ability to lead in robotics and autonomy. If they succeed, even shareholders with diluted ownership would see incredible returns. If they fail? Well, Musk gets nothing, and Tesla remains what it is today – a successful electric vehicle company that fell short of world domination.
The Reality Check
Now for the cold water. Tesla faces brutal competition in every one of these target areas. Autonomous driving has companies like Waymo and Cruise with years of head starts. Robotics has Boston Dynamics and countless startups. And electric vehicles? Everyone from Ford to BYD is catching up fast. The 20 million vehicle delivery target means Tesla would need to sell roughly twice as many cars as Toyota, the current global leader. And those robotaxis? They require solving full self-driving, which has proven much harder than anyone anticipated. This pay package essentially makes Musk’s compensation tied to achieving what would be the most dramatic corporate transformation in modern history. It’s either genius motivation or corporate fantasy – we’ll find out over the next decade.
