Musk’s $1 Trillion Pay Package Goes to Tesla Sharholders

Shareholders could decide the future of Elon Musk and Tesla this week as they vote on the proposed $1 trillion pay package many big investors are finding hard to accept at a time when Musk’s judgement and entrepreneurial instinct is in question. More from Headlight.News.

Tesla shareholders will write a new and decisive chapter in the company’s short history when they vote to either accept or reject the proposal from the company’s board of directors to offer CEO Elon Musk $1 trillion to stay on as the company’s CEO.

Musk has indicated he will abandon his post at Tesla without the promise of such an enormous payday. Robyn Denholm, the chair of Tesla’s board, has warned shareholders, who have grown increasingly concerned about Musk’s erratic behavior, that the CEO is serious about leaving the company if the record pay package is scuttled.

Several large investors, among them Norway’s massive Sovereign Wealth Fund, which was instrumental in the company’s growth, and CALPERS, the California public employees retirement fund, have indicated they will oppose the board’s proposal. The opposition to the pay package also has lined up the support of several firms specializing in lining up the votes of smaller shareholders on the grounds the astronomical pay day for Musk would ultimately come back to hurt other shareholders.

Searching for a replacement

With the outcome of the vote uncertain, the Tesla board has already looking for a potential replacement for Musk as CEO, according to some accounts, should he decide to move on. Musk has indicated he might leave Tesla to devote his time to Space X and other ventures in which he has an interest.

The Tesla CEO also has indicated he would take with him AI and other technologies that he’d positioned as critical to the automaker’s long-term future. In the latest Tesla master plan, released earlier this year, Musk downplayed automaking, putting more of a focus on AI, robotics and robotaxis.

Musk and his brother control more than 20% of Tesla’s shares, but they don’t have complete control of the company.

Tesla and Musk still revs up speculators

Musk has lots of fans among speculators enamored by the narrative that Tesla’s top executive has emerged as a once-in-a-century genius who almost overnight redefined the automotive industry and business in general.

Even the company’s recently lackluster performance in the automotive industry – its profits dropping by half in the third quarter — has not deterred Musk’s fans. They believe the value of Tesla stock will continue to climb as the company moves forward with investments in robots, artificials intelligence and robotaxis. (Tesla shares currently are hovering around $460 a share. That’s short of its $488.54 high for the last 52 weeks, but well above its $214.25 low,)

Tesla has invested billions of dollars in various technologies even as its automotive business — which stood at the heart of the company a decade ago — has begun to stall. The shortcomings of Tesla as a vehicle builder are wrapped up in the failure of Cybertruck, which Musk once celebrated as a key to the company’s future.

Politics become huge distraction

Musk’s emergence as a right-wing political figure and his increasingly erratic behavior have alienated many potential EV buyers in North America and in Europe, especially after the South African-born entrepreneur signed on as head of President Donald Trump’s controversial Department of Government Efficiency. Complicating matters, Musk subsequently entered into a high-profile feud with the president after leaving his post with DOGE last May.

Tesla’s U.S. sales might have been between 67% and 83% higher, or about 1 million to 1.26 million additional vehicles, from October 2022 to April 2025, had it not been for what researchers call the “Musk partisan effect,” according to a working paper from the National Bureau of Economic Research by Yale University economists.

Musk’s brief tour in Washington led a number of traditional Tesla bulls to call for him to either leave Washington or resign from Tesla. That fueled rumors among some fund managers investors that Tesla’s board had begun actively looking for a replacement. Such speculation was dashed when the board came up with the $1 trillion pay proposal – nearly 20 times higher than a prior pay plan that was subsequently blocked by a Delaware court.

Musk’s ability to tackle the future now in doubt

Chroniclers of Tesla and Musk’s rise from Silicon Valley to world-wide fame and riches over the past two decades also are beginning to take its toll. Musk, who has made no secret of his use of drugs such as ketamine, is not the same person he was ten or fifteen years ago when he cultivated his reputation as a hard charging entrepreneur, according to author Kara Swisher, who has followed the Tesla CEO’s career for more than two decades.

Over the past year, when he discusses Tesla’s future, Musk does seem to have lost interest in the automotive end of Tesla’s business, which originally seemed to captivate him after pushing out Tesla’s original founders.

Getting the full $1 trillion not guaranteed

While Musk continues to promise Tesla will be able to deliver self-driving cars, the technical breakthrough that will make the technology practical at the retail level remains elusive to Tesla and other companies pursuing the same goal.

Autonomous driving technology is being used by Tesla’s nascent robocab operations which debuted over the summer in Austin, Texas. But, even with the use of onboard human backup operators, there have been a growing number of crashes raising concerns with federal traffic safety regulators. Critics also contend Tesla has a long way to go to catch up to Alphabet’s Waymo robotaxi service, widely seen as the gold standard operator.

That could pose problems for Musk’s ability to claim the full $1 trillion, even if approved by shareholders. Tesla’s board set a number of hurdles the company must achieve under the CEO, including targets for expanding the robocab operations, building a market for the Optimus robot and hitting sales goals for Tesla’s EVs.