Tesla’s board is urging shareholders to approve CEO Elon Musk’s unprecedented $878 billion stock-based pay package, warning that rejection could prompt him to leave the company. The high-stakes vote on Thursday will decide whether Musk receives what could become the largest CEO compensation in corporate history.
The board argues that only Musk can deliver Tesla’s next transformation—turning the electric vehicle maker into an AI and robotics powerhouse capable of building millions of self-driving robotaxis. If Musk meets all performance targets, Tesla’s market value would rise to $8.5 trillion, with Musk owning roughly a quarter of the company.
Opponents, including CalPERS and Norway’s $2.1 trillion sovereign wealth fund, have denounced the deal as excessive and risky. They warn that Tesla’s board has tied the company’s future too tightly to one individual, violating basic governance principles. The Delaware court that voided Musk’s previous $56 billion pay package called it an “unfathomable sum,” negotiated by conflicted directors.
The new Texas-based plan allows Musk to vote his 15% stake, potentially giving him decisive influence. Critics say this shift, along with Texas laws that make shareholder lawsuits more difficult, tilts the playing field heavily toward Musk.
“This is a board negotiating with someone who’s holding all the leverage,” said Stanford’s David Larcker. “If Musk walks, Tesla’s valuation could crater—but rewarding him like this sets a dangerous precedent.”
