Elon Musk expected to prevail in Tesla shareholder vote over CEO’s $1 trillion pay plan
Elon Musk, CEO of SpaceX and Tesla, attends the Viva Technology conference at the Porte de Versailles exhibition center in Paris on June 16, 2023.
Gonzalo Fuentes | Reuters
Tesla is expected to announce on Thursday the results of a shareholder vote determining whether CEO Elon Musk should receive a pay package of nearly $1 trillion worth of stock over the next decade.
There’s little mystery to the outcome.
The electric vehicle company has suggested that shareholders approve the plan. Between Musk’s substantial ownership and a hefty base of retail investors who almost always vote with the CEO, the numbers are difficult for the opposition, even though top proxy advisors Glass Lewis and ISS recommended voting against the package.
Results of the vote are expected to be shared after Tesla’s annual meeting in Austin, Texas.
Board Chair Robyn Denholm, and other Musk fans, have argued that the outsized pay plan would keep Musk at the helm of the company, and that he’s critical to Tesla’s future and its ability to compete in robotics and artificial intelligence.
Baron Capital’s Ron Baron said in a lengthy post on X, Musk’s social network, that he’s supporting the Tesla CEO.
“Elon is the ultimate ‘key man’ of key man risk,” Baron wrote. “Without his relentless drive and uncompromising standards, there would be no Tesla.”
But there are some vocal opponents. Norway’s $2 trillion sovereign wealth fund, managed by Norges Bank Investment Management (NBIM), said it would vote no. Norges is one of Tesla’s top shareholders.
“While we appreciate the significant value created under Mr. Musk’s visionary role, we are concerned about the total size of the award, dilution, and lack of mitigation of key person risk — consistent with our views on executive compensation,” NBIM said in a statement this week.
Shareholder advocate and governance expert James McRitchie, who drives a Tesla, is also opposing the plan. The company needs to address a number of risks, he said, especially around demand and profitability with the sunsetting of federal EV tax credits that have long incentivized purchases.
“Tesla has all these fanboys. So many retail investors bought the stock because they love the cars,” McRitchie said. “There’s a lot to love there, but you should also pay attention to the finances and risks.”
Tesla shares are up 14% this year after a steep third-quarter rally lifted the stock into the green following a brutal start to 2025. Musk’s purchase of $1 billion worth of stock aided the rebound.
‘Robot army’
Tesla introduced the new pay plan in September. The package for Musk, already the world’s richest person, consists of 12 tranches of shares to be granted if Tesla hits certain milestones over the next decade. It would also give Musk increased voting power over the company, acceding to demands that he’s made publicly since early 2024.
“If we build this robot army, do I have at least a strong influence over that robot army?” Musk said to analysts on the company’s third-quarter earnings call last month. “I don’t feel comfortable building that robot army if I don’t have at least a strong influence.”
The full award would give Musk, who holds about 13% of the EV maker, more than 423 million additional shares and take his stake to about 25%.
Musk would receive the first tranche of stock if Tesla hits a market capitalization of $2 trillion. Tesla’s current market cap is $1.54 trillion.
The next nine tranches would be awarded if Tesla’s value increases by increments of $500 billion, up to $6.5 trillion. Musk would earn the last two tranches if the market cap rises by increments of $1 trillion, meaning it would need to hit $8.5 trillion for Musk to get the full package.
Other goals tied to the pay plan include reaching 20 million vehicle deliveries, 10 million active FSD subscriptions, 1 million bots delivered and 1 million robotaxis in commercial operation. To date, Tesla has delivered more than 8 million vehicles, according to its September proxy statement.
The proposed plan doesn’t specify whether the FSD subscriptions must be purchased or could include free trials. Tesla currently provides partially automated driving systems, which it markets as “FSD Supervised” in the U.S. The company intends to improve its FSD Supervised systems so they don’t require human supervision on board.
Tesla also laid out a series of earnings milestones, beginning with $50 billion in annual adjusted profit and moving up to $400 billion. In the third quarter, Tesla reported adjusted EBITDA of $4.2 billion.
As Reuters previously reported, Musk could still score tens of billions of dollars without meeting most of the targets laid out for him by the board, collecting more than $50 billion just by hitting a handful of the more attainable goals.
There are also a list of “covered events” in the award terms that would allow Musk to earn shares without meeting the required operational milestones.
Covered events include natural disasters, wars, pandemics, and changes to “international, federal, state and local law, regulations or other governmental action or inaction,” that could hamper the company’s ability to design, manufacture or sell its products down the line.
There are other benefits to Musk.
The pay plan doesn’t require him to dedicate a minimum amount of time to Tesla, nor does it at all limit his involvement in politics.
In addition to leading Tesla, Musk runs xAI which has merged with X, leads SpaceX and its satellite internet business Starlink, and is a founder of brain computer interface company Neuralink and tunneling venture The Boring Company.
He’s also been heavily engaged in politics, most notably working to propel President Donald Trump back to the White House, and then leading a sweeping effort to slash the federal government at the beginning of his second term.
The National Bureau of Economic Research published a paper last month estimating that Tesla sales from October 2022 through April of this year in the U.S. would have been 67% to 83% higher without Musk’s “polarizing and partisan actions.”
Shareholders are voting on the plan after the Delaware Court of Chancery ruled last year that Musk’s earlier 2018 pay plan was improperly granted by the Tesla board and must be rescinded.
Nell Minow, a corporate governance expert and chair of ValueEdge Advisors, said she would vote against the new pay plan for Musk, describing him as a “part-time CEO” today.
“If they said we’re going to pay him a trillion dollars, but he’s going to give up all of his outside activities, he’s going to shut up about politics, and really spend all this time making this a great company, then I’d say, OK, let’s talk about it,” Minow said. “But he’s not doing any of those things.”
A trader works on the floor of the New York Stock Exchange on Oct. 30, 2025 in New York.
Angela Weiss | AFP | Getty Images
This week’s equity market wobble, which saw a retreat in U.S. artificial intelligence-related stocks amid ongoing concerns over stretched valuations, has thrust contagion fears into the spotlight for global investors.
Goldman Sachs CEO David Solomon warned this week of a “likely” 10-20% drawdown in equity markets at some point within the next two years, while the International Monetary Fund and the Bank of England have both sounded the alarm bells.
Bank of England Governor Andrew Bailey highlighted the possibilities of an AI bubble in an interview with CNBC on Thursday, noting that the “very positive productivity contribution” from technology companies could be offset by uncertainty around future earning steams in the sector.
“We have to be very alert to these risks,” Bailey said.
Legrand is one of several European companies which is benefitting from the AI boom. The French company, which sells products to Alphabet, Amazon and others to help cool servers, has seen its shares surge 37% this year, roughly as much as Nvidia.
Anders Danielsson, CEO of Swedish construction group Skanska, which builds data centers and other AI infrastructure assets, shrugged off concerns about a slowdown.
“In the U.S. we have a very strong pipeline of data centers — we don’t see any slowdown there,” he told CNBC. “We are working with large international customers and they are also interested in building data centers in central Europe, and in the Nordics and the U.K. We haven’t seen any slowdown really.”
Meanwhile Kiran Ganesh, multi-asset strategist at UBS, highlighted a notable lack of volatility, adding that the broader narrative remains positive.
“We’ve had a remarkably smooth rally given the scale of investment that’s taken place, given the uncertainty about future cash flows, and given some of those concerns about valuation,” Ganesh told CNBC’s “Europe Early Edition” on Friday.
“As we’ve gone through earnings season, I think it’s reasonable to have expected some volatility, but actually when we look at the results, and they have been reassuring, we’re still up over the course of earnings season and they have been beating expectations. So although some volatility has been materializing this week, we think that’s to be expected and the bigger picture still remains positive.”
Still, many investors appear to be souring on the increasingly-stretched valuations.
In Asia, shares of SoftBank Group — which is active across AI infrastructure, semiconductor and application companies — have fallen sharply, with the Japanese group suffering almost $50 billion in weekly losses. SoftBank resumed its downward trajectory on Friday, after dropping about 10% on Wednesday.
On Tuesday, it emerged that Scion Asset Management, the hedge fund led by “The Big Short” investor Michael Burry, had built short positions against both Palantir Technologies and Nvidia, drawing the ire of Palantir CEO Alex Karp.
“Some big tech stocks are on sale, and are presenting buying opportunities for investors, especially for investors who have missed out on the market’s strength over the past two months,” said Glen Smith, chief investment officer at GDS Wealth Management.
Other investors have flagged concentration risk in U.S. equities, and advocate looking further afield.
Luca Paolini, chief strategist at Pictet Asset Management, said stretched valuations mean the firm is neutral on U.S. names. “Emerging markets are preferred, with diversified exposure across India, Brazil, and broader EM benefiting from AI-driven investment and monetary easing,” Paolini said in a market commentary.
Technology
CEO of Southeast Asia’s largest bank warns investors: ‘Buckle up, we’re in for a volatile ride’
Tan Su Shan is the CEO and director of DBS Group.
Bloomberg | Bloomberg | Getty Images
With valuations in the U.S. stock market becoming increasingly stretched, the chief executive of Southeast Asia’s largest bank is warning investors to expect turbulence ahead.
“We’ve seen a lot of volatility in the markets. It could be equities, it could be rates, it could be foreign exchange,” DBS CEO Tan Su Shan told CNBC, adding that she expects that volatility to continue.
Tan, who took over the helm of DBS from longtime CEO Piyush Gupta in March, said that investors were particularly worried about the lofty valuations of artificial intelligence stocks, especially the so-called “Magnificent Seven.”
The Magnificent Seven — Amazon, Alphabet, Meta, Apple, Microsoft, Nvidia and Tesla — are some of the major U.S. tech and growth stocks that have driven much of Wall Street’s gains in recent years.
“You’ve got trillions of dollars tied up in seven stocks, for example. So it’s inevitable, with that kind of concentration, that there will be a worry about. ‘You know, when will this bubble burst?'”
Earlier this week, at the Global Financial Leaders’ Investment Summit in Hong Kong, it was likely there would be a 10%-20% drawdown over the next 12 to 24 months.
Morgan Stanley CEO Ted Pick said at the same summit that investors should welcome periodic pullbacks, calling them healthy developments rather than signs of crisis.
Tan agreed. “Frankly, a correction will be healthy,” she said.
Recent examples include Advanced Micro Devices and Palantir, both of which posted stronger-than-expected quarterly results on Tuesday, yet their shares — and the wider Nasdaq — fell.
Her remarks follow similar warnings by the International Monetary Fund and central bank chiefs Jerome Powell and Andrew Bailey, who have all cautioned about inflated stock prices.
Singapore as diversification play
Tan advised investors to diversify rather than concentrate holdings in one market. “Whether it’s in your portfolio, in your supply chain, or in your demand distribution, just diversify.”
Tan, who has over 35 years of experience in banking and wealth management, noted that Asia could attract more investment from the U.S.—and that it’s not a bad thing.
Singling out Singapore and the country’s central bank’s efforts to boost interest in the local markets, Tan described the city-state as a “diversifier market.”
“We’ve got rule of law. We’re a transparent, open financial system and stable politically. We’re a good place to invest…. So I don’t think we’re a bad place to think about diversifying your investments.”
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