Elon Musk, CEO of Tesla, is poised to receive a staggering pay package valued at nearly $1 trillion, pending the results of a shareholder vote. Tesla is expected to announce the vote’s outcome after its annual meeting in Austin, Texas, on Thursday.
Despite some opposition, including from Norway’s $2 trillion sovereign wealth fund, which has expressed concerns over the plan’s size and potential dilution of shares, the company has hinted at shareholder approval. Musk’s significant ownership stake and support from retail investors are likely to ensure the plan’s success.
Supporters, including Baron Capital’s Ron Baron, argue that Musk’s leadership is vital for Tesla’s future, especially as the company expands into robotics and artificial intelligence. Critics, however, like shareholder advocate James McRitchie, caution that the company must address financial risks amid changes in EV tax incentives.
The proposed pay plan, introduced in September, would grant Musk 12 tranches of stock linked to specific milestones over the next decade. This includes increasing Tesla’s market capitalization to $2 trillion and delivering 20 million vehicles. Currently, Tesla’s market cap stands at $1.54 trillion.
Additionally, the plan allows Musk to earn shares without fully meeting operational targets due to various “covered events” such as natural disasters or regulatory changes. Notably, Musk is not required to commit a minimum amount of time to Tesla or limit his political activities, raising questions about his dedication to the role.
As Tesla continues to navigate the evolving market landscape, the outcome of this vote will be pivotal in shaping the company’s future and Musk’s role within it.
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