Elon Musk pay package approved: Tesla shareholders green-light up to $1 trillion

Tesla shareholders endorsed a pay package for Elon Musk that could make him the world's first trillionaire.Why it matters: Tesla chair Robyn Denholm had warned that Musk could leave if shareholders rejected the compensation plan, while critics said it was exorbitant and unnecessary. Driving the news: Tesla disclosed Thursday during its annual meeting that stockholders had signed off on the pay package worth up to nearly $1 trillion, which ties Musk's compensation to ambitious growth targets.More than 75% backed it, general counsel Brandon Ehrhart said."I'd like to give a heartfelt thanks to everyone who supported the shareholder votes," Musk said. "I super appreciate it."Flashback: The pay package serves as a replacement for a deal that a Delaware judge had overturned.The judge had blasted the original $56 billion deal announced in 2018 as having been implemented without proper disclosure.Zoom in: Musk had hinted that he could leave the company if the new deal wasn't approved, suggesting he didn't want to spend time pursuing his vision of humanoid robots without sufficient control of Tesla shares."If I go ahead and build this enormous robot army, can I just be ousted at some point in the future? That's my biggest concern," Musk said in October on an earnings call. "That is really the only thing I'm trying to address with this so-called compensation, but it's not like I'm going to go spend the money."By the numbers: The new pay package lays out a series of milestones to hit.Notably, if Tesla's market capitalization hits $8.5 trillion by 2035 — about six times where it is today — he could unlock the full award.It would aware an additional 12% of the company to Musk, taking his ownership of Tesla up to about 25%."We believe this was the smart move ... as the biggest asset for Tesla is Musk," Wedbush Securities analyst and Tesla bull Dan Ives wrote in a research note. "And with the AI Revolution this is a crucial time for Tesla ahead with autonomous and robotics front and center."At least one major shareholder, Norwegian sovereign wealth fund Norges Bank Investment Management, voted against it: "While we appreciate the significant value created under Mr. Musk's visionary role, we are concerned about the total size of the award, dilution, and lack of mitigation of key person risk."

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