Musk wins $1tn Tesla pay deal despite backlash

Elon Musk’s pay award requires him to transforming the car maker into an AI and robotics giant - Susan Walsh/AP Photo

Elon Musk has clinched the largest corporate pay award in history after being awarded a $1 trillion (£760bn) deal by Tesla despite a shareholder backlash.

On Thursday, the world’s richest man secured the backing of 75pc of Tesla shareholders for the unprecedented pay award, which hinges on Mr Musk transforming the electric car maker into an artificial intelligence and robotics giant.

The deal, confirmed at a Tesla shareholder vote in Texas, stands to further inflate Mr Musk’s wealth. He is already worth just under $500bn.

As the result of the vote was announced, shareholders in the room chanted “chants of “Elon, Elon, Elon!”

Mr Musk thanked shareholders for their backing. “I super appreciate it,” he said.

He added Tesla could ultimately produce billions of two-leg Optimus robots, which he claimed could even eliminate poverty and perform cutting-edge surgery.

Mr Musk said: “I think there could be tens of billions of Optimus robots out there.”

To secure the maximum payout, which would award him 12pc of Tesla’s shares, Mr Musk must grow Tesla’s market value to $8.5 trillion, sell 20m electric cars and launch one million robo-taxis and humanoid robots over the next decade.

The electric carmaker is currently worth $1.4 trillion.

The pay vote has taken on further significance after he recently implied he could abandon the electric carmaker if shareholders failed to pass the pay award.

Mr Musk had faced a mounting backlash over the pay deal, with major investors including Norway’s sovereign wealth fund saying they were voting against the pay award in the lead up to the vote.

The Tesla founder also labelled proxy advisors Glass Lewis and ISS “corporate terrorists” after they called on shareholders to block the pay deal.

Glass Lewis had warned the deal offered Mr Musk “extraordinary pay levels without commensurately exceptional performance”.

Tesla’s army of retail investors and allies of Mr Musk such as Ron Baron’s Baron Capital helped tip the vote in Mr Musk’s favour.

Robyn Denholm, Tesla’s chairman, had warned investors that there was a risk that the billionaire “give up his executive position” if the vote had not gone his way.

The pay award comes despite a judge quashing an earlier pay deal for Mr Musk, which was worth $56bn, after a shareholder lawsuit.

Mr Musk has also been rewarded despite concerns from shareholders that his multiple business ventures, including xAI and SpaceX – as well as his involvement in politics, have proved a distraction.

The pay deal also comes even as Tesla grapples with weak demand for its once pioneering electric cars, such as the Model 3, and growing competition from rivals in China.

Mr Musk has pledged to transform Tesla with robotics, including promising to create trillions of dollars from its humanoid Optimus robots and self-driving taxis, although so far these projects have been beset by delays.

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