Tesla investors back Elon Musk $1tn stock award
Tesla investors have backed a record stock award for Elon Musk, with roughly three in four votes in favour at the company’s annual meeting in Austin, Texas. The number sounds unreal-nearly $1tn at the top end-so let’s slow down and unpack what has actually been approved and what it could change for you as a learner, an early investor, or simply a curious reader.
This is not a cash salary. Under the plan, Musk takes no wage and only receives more than 400 million new Tesla shares if the firm meets tough goals over about ten years. Those goals are tied to big jumps in market value and operational milestones defined by the board. In short: no targets, no shares; targets met, a very large stock grant.
Why do 400 million extra shares matter? Because control in a public company is about voting power. Musk already owns about 13% of Tesla, according to BBC News reporting. If he earns the new shares, his influence would grow-without changing the company’s basic structure-by increasing the votes he can cast on strategy, board seats and major deals. Investment manager Kathryn Hannon at RBC Brewin Dolphin told BBC News the package would increase his voting power, which he has sought for years.
Not everyone said yes. Several major institutions-including Norway’s sovereign wealth fund and the US pension giant CalPERS-voted against the award, citing governance concerns. That meant Musk leaned on Tesla’s unusually large community of retail shareholders. He and his brother Kimbal, who sits on the board, were allowed to vote, a detail that matters when you think about who holds influence inside the company.
There is a legal backstory you should know. Earlier shareholder approvals of a similar pay deal were struck down by a Delaware judge who said Tesla’s board was too close to Musk. Tesla then changed its legal home from Delaware to Texas. The Delaware Supreme Court is reviewing the earlier ruling, and the fresh approval may yet be tested in court. For students of business law, this is a live example of how incorporation states and courts shape corporate power.
The meeting itself felt more like a product rally than a finance seminar. Musk highlighted Optimus, Tesla’s humanoid robot, positioning it as central to the company’s future. He spoke about Full‑Self Driving later, suggesting the system is edging closer to everyday use. BBC News also notes US regulators are investigating Tesla’s self‑driving features after incidents including running red lights and wrong‑side driving, some leading to crashes and injuries. That tension-ambition vs safety oversight-is one to watch.
Analyst opinions split. Wedbush’s Dan Ives argues the market is beginning to value Tesla more as an AI company than a pure carmaker. Gene Munster at Deepwater observed that Musk’s focus begins with Optimus rather than cars and robotaxis. If you’re learning to read analyst notes, notice how different lenses-AI platform vs EV manufacturer-can drive very different valuations.
Other investors are wary. Ross Gerber told BBC News that while the vote marks a striking moment in business, Tesla faces financial pressures and brand damage from Musk’s polarising public profile; his firm has trimmed its stake. He also questioned whether there is broad demand for humanoid robots and reminded investors that robotaxi competition from companies like Waymo is already intense. That’s a classic investment skill: separating hype from product‑market fit.
For context, BBC News reports Tesla shares are up more than 62% over the past six months, even as sales have slipped over the last year. The political storyline-Musk’s brief alignment with US President Donald Trump and a later break-has influenced how parts of the public view the brand. Brand strength affects pricing power, recruitment, and policy relationships, so it isn’t just a PR footnote.
Media‑literacy check on the headline figure: “$1tn” is a ceiling, not a cheque. It assumes Tesla’s value climbs high enough for the share award to be worth that on paper. Stock grants can create life‑changing wealth, but only if performance targets are hit and the share price holds up. They also dilute existing holders because new shares are issued. Understanding this helps you read bold claims with a cooler head.
How to read “75% in favour”: it means three quarters of votes cast, not three quarters of all possible shares. Companies often campaign for support before big votes-Tesla’s directors recorded promotional videos and rallied supporters online, according to BBC News. When you encounter vote percentages, always ask who voted, who didn’t, and what the base is.
What’s next? Keep an eye on two tracks. In the courts, Delaware and Texas proceedings will shape how (and whether) this award is finally cemented. In the business, watch whether Tesla’s near‑term energy goes to EV affordability and manufacturing, or to software, robotaxi and Optimus. For our learners: bookmark this as a case study in incentives, corporate governance and how power can be built through shares as much as through job titles.