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Source: Tencent Technology, compiled by: Wuji
On November 6, Eastern Time, Tesla held its annual shareholder meeting at the Austin Gigafactory in Texas.After on-site and advance voting statistics, shareholders votedMore than 75% of votes approved Tesla CEO Elon Musk’s new round of CEO compensation incentive package——A performance betting plan with a potential value of nearly US$1 trillion.
The passage of this resolution means that if MuskUpon completing various market value and operational milestones set in the plan within the next ten years, he will gradually obtain approximately 423.7 million restricted shares (RSUs) of the company., its theoretical value can reach up to about 1 trillion US dollars; if the goal is not achieved, the corresponding reward will expire.
Picture: Tesla shareholders meeting scene
The market reacted quickly to the results, with Tesla’s stock price rising by more than 3% after hours.The market generally regards this approval as confirmation of the stability of the company’s leadership, and also means that investors are willing to continue to bet on Musk’s long-term vision.
01 Detailed explanation of the gambling agreement: twelve stages, ultimate goal of 8.5 trillion market value
This compensation package is essentially a ten-year performance betting agreement.
According to the board of directors’ disclosure, the core contents of the plan are as follows:
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Grant size: Musk will be granted 423.7 million restricted shares (RSUs), accounting for approximately 12% of the adjusted equity.
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Unlocked in stages: A total of 12 stages (tranches), each stage must meet the market capitalization threshold and at least one operational or financial goal at the same time.
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market capitalization target: Starting from the current approximately US$1.5 trillion, the ultimate goal is US$8.5 trillion.For each stage reached, the company’s market value needs to increase by US$500 billion to US$1 trillion.
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performance goals: Including cumulative delivery of 20 million vehicles, FSD active users reaching 10 million, Robotaxi commercial operation of 1 million units, Optimus robot delivery of 1 million units, and annual adjusted EBITDA reaching US$400 billion (verified for four consecutive quarters).
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Protection Clause: The market value needs to remain above the target for three consecutive months, and the performance target needs to be achieved for four consecutive quarters; if Musk resigns, the unlocked part will become invalid.
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Compare 2018 plan: The new plan has been comprehensively upgraded in scale and goals, extending from a single financial indicator to the artificial intelligence and robotics industry chain, making the challenge more long-term and strategic.
Robin Denholm, chairman of Tesla’s board of directors, wrote in a letter to shareholders: “This is not only an incentive plan, but also a future contract. Retaining Musk is the key to Tesla’s continued innovation.”
02 Overview of major proposals: Musk received 208 million share incentives
Tesla announced at the shareholder meeting that shareholders voted on almost all proposals in accordance with board recommendations.Specific results include:
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Re-elected as director: Three directors, Ira Ehrenpreis, Joe Gebbia and Kathleen Wilson-Thompson, were re-elected.
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Shares granted without conditions: After depleting employee stock reserves and temporarily freezing employee compensation, Musk was awarded 208 million shares of common stock with no strings attached.
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Sustainability and child labor audit proposals rejected: Shareholders voted against the relevant audit requirements.
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Continue to limit shareholders’ ability to hold themselves accountable: Shareholders decided to maintain the current rules, which means that unless they hold more than 3% of the equity and the market value exceeds approximately US$44 billion based on the current stock price, they cannot sue management for breach of fiduciary duties.Minority shareholders at the meeting vocally protested the proposal and shouted “boo.”They were obviously very unhappy that they were being denied the right to vote.
There are clear differences between the following voting results of shareholders and the recommendations of the board of directors::
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Annual Director Re-election: Shareholders elect to re-elect all directors annually.
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Maintain two-thirds supermajority requirement: Shareholders voted to continue requiring a 2/3 supermajority vote for any shareholder proposal to pass, making it more difficult for shareholders to express their opinions.Especially in the case of shareholders diluting their holdings in order to grant more shares to Musk, it is almost impossible to achieve a two-thirds majority unless all shareholders unite against Musk.
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xAI investment is not authorized: Shareholders did not authorize the board of directors to provide a bailout for xAI, Musk’s privately-founded AI company (more votes in favor than against, but abstentions were also high).Because the proposal is an advisory vote, the Board will consider these results to determine next steps.
The actual voting results showed that shareholders followed the board of directors’ recommendations on most proposals, and some shareholders even made verbal protests at the meeting against this restricted voting. However, in the end, the majority of shareholders still agreed to maintain the current articles of association, further limiting the shareholder supervision rights.
This means,Most shareholders actually chose to sacrifice their voting rights and concentrate control of the company in the hands of a few people, including Musk..
03 Bill of Rights: It’s not all Musk extravaganza
This general meeting of shareholders continues to restrict shareholders’ ability to hold themselves accountable, which has aroused widespread concern.
The bill seeks to restore the right of shareholders to sue Tesla’s management and board of directors after the company changed its charter after moving its registered headquarters to Texas, limiting shareholders’ ability to assert their rights through derivative actions.
Thomas DiNapoli, the New York State Comptroller and trustee of the New York State Public Retirement Fund, publicly supported the bill on behalf of the fund that holds more than 3.3 million Tesla shares.
He noted: “Since Texas allows this, the new charter prevents almost all investors from bringing derivative lawsuits on their own unless they own 3% of the shares. This means that only Musk and a handful of large Wall Street funds have standing to act independently, leaving the board of directors virtually immune from accountability.”
DiNapoli further stated: “Tesla claims that the rule is intended to prevent frivolous lawsuits, but the courts already have the tools to dismiss frivolous cases. Charter restrictions hinder effective supervision and make shareholders feel that the board of directors is no longer accountable to them. Our proposal simply hopes to repeal this provision, restore accountability, and ensure that investors have the right to protect the long-term value of the company.”
He also pointed out that this is only part of Tesla’s governance problem: “The board’s lack of independence allows the CEO to spread his energy to manage multiple outside enterprises while advancing a proposal that may award $1 trillion in awards and further expand control.These problems stem from the same underlying problem: the failure of boards to independently oversee management.“
DiNapoli concluded: “Tesla changes the world through innovation, but without an accountability mechanism, no company can prosper in the long term. Strong governance protects investors and strengthens the company’s long-term competitiveness.”
04 About voting: Institutions are divided and retail investors decide the outcome.
This general meeting of shareholders continues to restrict shareholders’ ability to hold themselves accountable, which has aroused widespread concern.
Tesla’s shareholding structure disclosed before the meeting shows that Musk and his trust account for about 14%; Vanguard, BlackRock, Morgan Stanley (Counterpoint Global), Fidelity, etc. are major institutional shareholders.
Norway’s sovereign wealth fund (NBIM) and California Public Employees’ Retirement Fund (CalPERS) clearly voted against it, but their overall shareholdings were limited.Proxy advisory firms ISS and Glass Lewis both recommended opposition, citing governance risks and equity dilution issues.
However, it is the large number of retail shareholders that ultimately determines the number of votes.The survey shows thatMore than 70% of retail investors voted in favor of the remuneration package.
Analysts pointed out that the “emotional trust” of retail investors has become the key difference-they believe that motivating Musk is betting on Tesla’s future.
05 The battle for control behind Musk’s wealth and compensation
According to the Bloomberg Billionaires Index, Musk is currently the world’s richest man, with a net worth of approximately US$473 billion.The approval of this salary plan may make him the first individual in the world to join the “Four Comma Club” – that is, with a wealth of more than US$1 trillion.
Tesla’s revenue fell in the first half of the year, and some protesters even demonstrated outside the showroom to protest his role in the U.S. government’s cuts in foreign aid and public spending.
Facing external doubts, Musk chose to counterattack with a “future narrative”: He is shifting Tesla’s focus to the two core directions of humanoid robots (Optimus) and Robotaxi self-driving taxis, trying to create a new growth curve after electric vehicles.
However, the two businesses are still in the research and development stage – Robotaxi still needs safety personnel to accompany it, and orders for the robots have not yet been opened.
On the social platformTheir common refrain: “Musk only gets paid if he makes Tesla more valuable.”
Tesla’s investor relations department wrote on a page calling for shareholders to vote: “This compensation package is designed to ensure that Elon’s time, energy and talents are focused on Tesla for the long term and create amazing long-term value for shareholders.”
According to the terms of the agreement,Musk needs to remain CEO for the next 7 and a half years, you can gradually acquire shares.He can continue to hold CEO positions at companies such as SpaceX and xAI at the same time.
However, the plan still caused controversy among institutional investors.Norway’s sovereign wealth fund voted against, stating: “We recognize the value created by Musk’s vision, but are concerned that the size of the reward is too large and the equity dilution is serious., and the lack of key person risk mitigation mechanisms.”
Despite this, market expectations were generally optimistic.Prediction website Polymarket gave the proposal a 93% chance of passing ahead of the convention.
Musk himself, explaining the plan, emphasized that it’s not about money, but control.
He confessed at an investor network meeting last month: “If I really build a huge robot army, will I be driven out by the board of directors one day? This is what I am most worried about.”
“If I couldn’t maintain enough control, I wouldn’t dare build an army of robots like that.”
To achieve these goals, Musk faces unprecedented challenges.In addition,The salary agreement also requires Musk to “formulate a CEO succession framework.” Although there is no timetable for leaving, it means that he needs to design a system for succession..Musk and his brother Kimbal Musk both recused themselves from board votes to avoid conflicts of interest.
Musk currently directly holds approximately 411 million common shares, accounting for approximately 13% of the company’s total share capital.If family trusts and related holdings are included, the overall influence is close to 14%.
06 Market reaction and xAI investment: new variables after the vote of confidence
After the results of the shareholders’ meeting were announced, analysts generally believed that “the biggest uncertainty has been lifted.”
Morgan Stanley pointed out in its latest report that the result of the vote was a “referendum of trust in Musk” and would help boost market confidence in the short term.
But the governance risk debate has not died down.After the meeting, institutions such as the Norwegian Sovereign Fund, CalPERS, ISS and Glass Lewis reiterated that they are worried that an incentive plan of this scale will further concentrate power and weaken the independence of the board of directors.
At the same time,Tesla’s other proposal – investing in xAI – has not yet been finalized.
A Tesla spokesperson said that although most shareholders support investing in xAI, the artificial intelligence company founded by Musk, a “significant number of shareholders have chosen to abstain.”He revealed that Tesla’s board of directors will “study next steps” to determine follow-up investment methods and terms.This means that although the xAI motion has been approved by the majority, it still needs further deliberation and has not yet constituted a final resolution.
07 Conclusion: The beginning of the trillion-dollar gambling game
This shareholder meeting not only determines Musk’s salary, but also defines Tesla’s direction for the next ten years.
Through the compensation package, Musk has deeply tied his personal destiny to the company’s growth; while shareholders have made a choice between trillions of dollars in potential dilution and a more ambitious vision.
As one analyst put it: “This is not a vote about money, but a vote about faith and the future.”
Next, whether Musk can fulfill this “Mars-style bet” will become the real test of Tesla in the next decade.
