Tesla Shareholders Back Musk’s Record Compensation Plan
Tesla shareholders have officially voted to reaffirm CEO Elon Musk’s performance-based pay package, originally valued at over $1 trillion when first approved in 2018. The shareholder decision, announced during Tesla’s annual general meeting on November 6, 2025, marks a pivotal moment for the company as it seeks to restore a compensation plan previously struck down in court.
Background of the Controversy
In January 2024, a Delaware judge voided Musk’s historic compensation package, citing flaws in the approval process and a lack of sufficient independence among Tesla’s board members. The court ruling questioned whether shareholders were fully informed when the plan was first passed. In response, Tesla’s board called for a new vote, aiming to reaffirm the same package through a transparent process that could withstand legal scrutiny.
Market and Investor Response
The reaffirmation vote sparked an immediate market reaction. Tesla’s stock (TSLA) climbed more than 7% in after-hours trading, signaling investor confidence in Musk’s leadership and future growth prospects. Analysts noted that the result demonstrated strong shareholder faith in Musk’s long-term vision, even amid ongoing debates about executive compensation fairness.
Structure of the Compensation
Musk’s pay arrangement remains entirely performance-based, without any salary or cash bonuses. Instead, it awards stock options tied to specific operational and market capitalization milestones. The plan was originally valued at roughly $1 trillion, reflecting Tesla’s rapid expansion and unprecedented gains in market value over recent years.
Tesla Board’s Position
Tesla’s board of directors strongly encouraged investors to reapprove the package, highlighting Musk’s crucial role in achieving the company’s ambitious 2018 performance targets. They argued that his leadership had driven Tesla’s dominance in the electric vehicle and renewable energy sectors, transforming it into one of the world’s most valuable automakers.
Musk’s Reaction
Celebrating the outcome, Elon Musk took to the stage with a lighthearted moment-dancing alongside Tesla’s humanoid robot, Optimus. In his remarks, Musk described the vote as a “victory for capitalism” and thanked shareholders for their continued trust in his vision for Tesla’s future.
Dissenting Views
Not all investors were supportive. Several large institutional shareholders had raised concerns about the package’s size, calling it excessive and warning about corporate governance implications. Despite this, shareholders also voted in favor of a separate proposal to relocate Tesla’s state of incorporation from Delaware to Texas, signaling broader support for Musk’s strategic direction.
What Comes Next
While the shareholder vote strengthens Tesla’s legal position, it does not automatically overturn the Delaware court’s prior ruling. The company is expected to use this new approval as evidence that investors fully endorse the package under fairer conditions. The case could influence how future corporate pay structures are evaluated in court.
With this reaffirmation, Tesla once again underscores its confidence in Elon Musk’s leadership-cementing his influence not only within the company but across the global technology and automotive industries.
