Tesla shareholders have given the green light to an unparalleled pay package for CEO Elon Musk that could soar to nearly $1 trillion. At Thursday's annual general meeting, 75% of votes supported the record-breaking deal, which was met with enthusiastic applause. Musk, already the richest individual globally, must significantly elevate Tesla's market value within a decade to unlock the reward, which involves hundreds of millions of new shares.
Much discussion has surrounded the scale of Musk's potential payout, drawing some criticism. However, Tesla's board justified the package by suggesting that Musk could leave the company without it—a loss they argue Tesla cannot risk.
Following the announcement in Austin, Texas, Musk infamously danced on stage to chants of his name. 'This is more than a new chapter; it's a whole new book for Tesla,' he proclaimed. With the aim of raising Tesla's market value from the current $1.4 trillion to $8.5 trillion, Musk also needs to bring one million self-driving robotaxis to commercial use. Despite these challenges, Musk's presentation pivoted to focus on the Optimus robot, leaving some analysts disappointed by his shift in focus away from electric vehicles.
Analyst Gene Munster from Deepwater Asset Management noted that Musk's vision centers on Optimus, with cars, FSD, and robotaxi markets not yet addressed. Musk later mentioned that Tesla was nearing readiness for full self-driving (FSD) features, yet these functionalities have come under scrutiny by US regulators following incidents resulting in accidents.
Tesla's shares have seen a moderate increase in after-hours trading, surging over 62% in the past six months. However, sales have dipped since Musk's previous association with former President Donald Trump, a relationship that eventually ended. Tesla shareholder and Gerber Kawasaki CEO Ross Gerber considers Musk's pay deal a significant milestone but emphasizes Tesla's ongoing struggles, including its financial performance and brand challenges.
Gerber also questions the demand for humanoid robots like Optimus, noting the fierce competition Tesla faces in the robotaxi industry from companies like Waymo. Recently, his firm reduced its stake in Tesla, partly due to the polarization surrounding Musk's public persona, which he claims has harmed the brand's value.
Despite these concerns, Wedbush Securities' Dan Ives, a consistent supporter of Musk, praises him as Tesla's greatest asset and believes the company's AI-driven valuation journey has been initiated anew. As Tesla navigates this transformative period, the CEO asserts confidence in the widespread appeal of the Optimus robot, daring skeptics to 'let it sink in.'