Tesla shareholders approve Musk's $1 trillion pay package

As expected, Tesla (TSLA) announced at its general meeting in Austin, Texas, that shareholders approved CEO Elon Musk's pay package, which could reach $1 trillion in overall compensation.

Tesla said Musk's package passed with over 75% approval.

This year's package — revealed in early September — would grant Musk 12 massive tranches of stock options tied to targets the board argues are aggressive.

Tesla shares rose 2% after the results of the vote were announced.

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Prior to approval of the latest plan, Musk held a 13% stake in Tesla after various share sales over the past couple of years, but he hasn't been "paid" in years, he said. His 2018 pay package is embroiled in a lawsuit in Delaware, where shareholders alleged they didn't have enough information to properly vet the compensation awarded by the board, and a trial judge agreed. The Delaware Supreme Court is currently weighing the merits of Tesla's appeal.

Read more: How to avoid the sticker shock on Tesla car insuranceElon Musk attends the opening ceremony of the new Tesla Gigafactory for electric cars in Gruenheide, Germany, on March 22, 2022. (Patrick Pleul/Pool via Reuters/File Photo)·via REUTERS / Reuters

Musk had previously said that he was uncomfortable leading Tesla without at least a 20% share of voting power, which the new package provides. Tesla chair Robyn Denholm said the new package was needed to motivate Musk in his Tesla duties and keep him in place as CEO. Musk threatened in the past that he would develop products like AI and robotics outside of Tesla if he didn't receive the control he desired.

Just this week, Norway's $1.9 trillion sovereign wealth fund, which holds a 1.2% stake in the carmaker, voted against CEO Elon Musk's new compensation package, arguing that the "total size of the award, dilution, and lack of mitigation of key person risk" were key concerns that needed to be addressed.

Tesla's other shareholders — both institutional and retail — felt otherwise.

This story is developing. Please check back for updates.

Pras Subramanian is Lead Auto Reporter for Yahoo Finance. You can follow him on X and on Instagram.

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