(MENAFN- The Arabian Post)

Shareholders of Tesla, Inc. approved a landmark compensation package for CEO Elon Musk that could ultimately be worth as much as $1 trillion, should the firm hit a series of ambitious milestones over the coming decade. Over 75 % of shares were cast in favour of the plan during the company's annual meeting in Austin, Texas, signalling continued investor faith in Musk's leadership.

The package ties Musk's payout to rigorous targets, including lifting Tesla's market capitalisation from around $1.5 trillion to $8.5 trillion within ten years, delivering some 20 million vehicles annually, deploying 1 million robotaxis and selling 1 million humanoid robots. At full vesting, the award would increase Musk's ownership stake to about 25 % of the company, up from roughly 15 %.

Tesla's board framed the arrangement as essential to retaining Musk at a critical inflection point. Chair Robyn Denholm and other directors emphasised that Musk's“singular vision” remains central to the business's pivot from electric vehicles toward artificial intelligence and robotics. The push underscores Tesla's broader strategy to move beyond car manufacturing and stake a claim in the autonomous-mobility, robotics and AI sectors.

However, the scale of the package has prompted concern among major institutional investors and corporate-governance analysts. Norges Bank Investment Management, manager of the Norwegian sovereign wealth fund and Tesla's sixth-largest shareholder, publicly declared it would vote against the proposal. The fund cited dilution of existing shareholders, concentration of power in a single individual and inadequate mitigation of“key-person risk”. Proxy advisory firms such as Glass Lewis and Institutional Shareholder Services also urged opposition.

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Critics argue that granting one individual the potential for such a windfall imposes heavy expectations on Tesla and raises questions about governance. The company must generate operating profits and achieve scale that few corporations have matched, a scenario many consider optimistic. Various activist investors and governance watchers note that execution-risk remains elevated, especially given Musk's involvement across multiple companies, including xAI and SpaceX.

Despite the controversy, supporters maintain that Musk is indispensable to Tesla's ambition. They point to his track record in product innovation, scaling production and combining hardware and software engineering in ways competitors have yet to match. One investor commented that without his“relentless drive”, Tesla would not be setting the pace in electric mobility and robotics.

Market reaction to the vote has been mixed. While the approval alleviates uncertainty around Musk's tenure, some shareholders remain cautious of the package's implications for dilution and the magnitude of the targets. Tesla's share price has shown volatility, reflecting investor scrutiny of whether the company can deliver on its bold roadmap.

Tesla insiders position this moment as a turning point. The company is shifting focus from expanding its electric-vehicle business into a broader“AI-robotics first” model, with ambitions to launch robotaxis under the proposed“Cybercab” concept and roll out its humanoid robot line. These new segments will be central to meeting the compensation milestones tied to Musk's pay.

Some analysts caution that external factors may complicate Tesla's path. Competition in EVs, regulatory scrutiny of autonomous-driving claims, supply-chain constraints and Musk's past entanglements with politics all present potential headwinds. The pay package therefore encompasses not only reward for achievement but is arguably a hedge by the board to keep leadership intact amid risk.

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The shareholder vote marks a significant moment for CEO compensation norms. By setting a threshold potentially in the trillions of dollars, Tesla has raised questions about the alignment between executive incentives, shareholder value and long-term performance. The next decade will provide a test of whether the aspirations embedded in the payout plan translate into sustained business transformation.

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