Source: Zim Celebs Blitz
Tesla shareholders have approved a record-breaking pay package for chief executive Elon Musk, potentially worth nearly $1 trillion (£760 billion), during the company’s annual general meeting held in Austin, Texas, on Thursday.
About 75% of shareholders voted in favour of the deal, which was met with loud applause from those in attendance. The package, described as the largest of its kind in corporate history, ties Musk’s compensation entirely to the company’s performance over the next decade.
Under the agreement, Musk will not receive a salary but could be awarded more than 400 million additional Tesla shares if he meets a set of demanding milestones. These include lifting Tesla’s market value from $1.4 trillion to $8.5 trillion, delivering 20 million vehicles, achieving one million self-driving Robotaxi vehicles, gaining 10 million Full Self-Driving (FSD) subscriptions, and reaching $400 billion in core profit.
After the vote, Musk celebrated on stage to chants of his name, telling the audience, “What we’re about to embark upon is not merely a new chapter of the future of Tesla, but a whole new book.” He added with a grin, “Other shareholder meetings are snoozefests but ours are bangers. Look at this. This is sick.”.
Despite the excitement among supporters, the pay deal has faced criticism. The Tesla board defended the decision, saying it was necessary to retain Musk, warning that he might leave the company if the deal was not approved. Some major institutional investors, including Norway’s sovereign wealth fund and the California Public Employees’ Retirement System (CalPERS), voted against the proposal.
The meeting also turned attention to Tesla’s Optimus robot, which Musk described as key to the company’s future. The humanoid robot, first unveiled in 2022, is designed to perform “unsafe, repetitive or boring tasks” using Tesla’s artificial intelligence technology. “Let it sink in where Musk’s head is at,” wrote Gene Munster, managing partner at Deepwater Asset Management, on X. “His vision of the ‘new book’ starts with Optimus. No mention of cars, FSD and robotaxi yet.”.
Later in his remarks, Musk said Tesla was “almost comfortable” allowing drivers to “text and drive essentially” using its Full Self-Driving feature. The comments come as U.S. regulators continue to investigate Tesla’s self-driving technology following several accidents involving its vehicles.
Tesla shares rose slightly in after-hours trading and have climbed more than 62% in the past six months. However, the company continues to face challenges, including falling sales and rising competition. “It is still not clear if there will be a big demand for humanoid robots,” said Tesla investor Ross Gerber, chief executive of Gerber Kawasaki. “Elon seems to be divorced from the reality that his opinion among the public is so low.”.
Analyst Dan Ives of Wedbush Securities, a long-time supporter of Musk, called him “Tesla’s biggest asset” and said the vote marked the start of “an AI-driven valuation” for the company. Ann Lipton, a law professor at the University of Colorado, said it remained uncertain whether Musk could achieve the targets but noted he had reached similar milestones ahead of schedule in 2018.
The vote also follows legal battles over Musk’s earlier compensation plan, which was struck down by a Delaware judge for being overly influenced by close allies on Tesla’s board. The company has since moved its incorporation to Texas, and the Delaware Supreme Court is currently reviewing the lower court’s decision.
Tesla board members Robyn Denholm and Kathleen Wilson-Thompson publicly supported the new deal in a campaign video ahead of the vote. Kathryn Hannon, investment manager at RBC Brewin Dolphin, said the new package would give Musk “increasing voting power over the company.” She added, “Elon Musk, whether you like him or not, is a visionary in this space, and aligning him with shareholders on that success journey is what this deal aims to do.”.
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Aleck is a freelance journalist who holds an honors in Business Entrepreneurship and management from Chinhoyi University of Technology and a Bachelors in New Media and Journalism from the Civitas University in Poland. He was acredited by The Zimbabwe media commision in 2020.
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