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By Jeremiah Fisayo-Bambi with AP
Published on •Updated
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The vote followed weeks of intense debate about his managerial record at the electric car manufacturer and whether anyone should receive such extraordinary pay.
The world’s richest man, Elon Musk, was on Thursday handed a chance to become history’s first trillionaire after a shareholder vote gave the Tesla CEO stock worth $1 trillion if he hits certain performance targets over the next decade.
The vote followed weeks of debate over his management record at the electric car maker and whether anyone deserved such unprecedented pay, drawing heated commentary from small investors to giant pension funds and even the pope.
It also came just three days after a report from Europe showing Tesla car sales plunged again last month, including a 50% collapse in Germany.
In the end, more than 75% of voters approved the plan as shareholders gathered in Austin, Texas, for their annual meeting in Austin, Texas.
“Fantastic group of shareholders,” Musk said after the final vote was tallied, adding, “Hang on to your Tesla stock.”
Musk won the vote handily, demonstrating that investors still have faith in him despite Tesla's declining sales, market share, and profits—all of which are mostly attributable to Musk.
After his involvement in conspiracy theories and his forays into politics in both the US and Europe, car customers left the company this year.
Critics accuse directors of dependence on Musk
By giving Musk new shares, the vote makes it possible for him to become a trillionaire, but analysts expect this won't be that easy.
Musk must meet several challenging operational and financial goals set by the board of directors that created the compensation package, including raising the company's stock market value by almost six times.
Despite opposition from several large funds, including CalPERS, the biggest US public pension, and Norway’s sovereign wealth fund, Musk saw the unprecedented deal approved by 75% of votes, drawing huge applause from the audience at the firm's annual general meeting.
Two corporate watchdogs, Institutional Shareholder Services and Glass Lewis, also opposed the package, which angered Musk so much that he took to calling them “corporate terrorists” at a recent investor meeting.
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While Musk saw a majority of votes, critics argue that the board of directors was too beholden to Musk, his behaviour too reckless lately, and the riches offered too much.
“He has hundreds of billions of dollars already in the company, and to say that he won’t stay without a trillion is ridiculous,” said Sam Abuelsamid, an analyst at research firm Telemetry who has been covering Tesla for nearly two decades.
“It’s absurd that shareholders think he is worth this much.”
For many supporters, it was important for the Tesla CEO to be incentivised to focus on the company as he works to transform it into an AI powerhouse using software to operate hundreds of thousands of self-driving Tesla cars and Tesla robots deployed in offices, factories, and homes.
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