Tesla Shareholders Approve Musk’s $1 Trillion Payday As European Sales Crater And U.S. Faces Post-Tax-Credit Collapse

Tesla shareholders voted Thursday to approve CEO Elon Musk’s unprecedented $1 trillion compensation package, potentially making him the world’s first trillionaire—despite collapsing European sales, mounting brand damage from political controversies, and serious questions about whether the world’s largest executive pay package will solve any of Tesla’s actual business problems.

The vote passed with more than 75% approval at Tesla’s annual shareholder meeting in Austin, Texas, according to NBC News. The timing couldn’t be more striking: shareholders approved the package on the same day Tesla’s October European sales data revealed catastrophic declines across nearly every major market, with registrations plummeting by double digits in key countries including Germany, Sweden, and Denmark.

Largest Corporate Compensation Package In History

The approved package would grant Musk up to 423.7 million additional Tesla shares over the next decade if he achieves extraordinarily ambitious targets, according to CNBC. Those milestones include growing Tesla’s market capitalization from approximately $1.4 trillion today to $8.5 trillion, expanding annual adjusted profit from current levels to $400 billion, delivering 20 million vehicles cumulatively, deploying 10 million Full Self-Driving subscriptions, and producing 1 million Optimus humanoid robots and 1 million robotaxis.

Musk currently owns roughly 12.5% of Tesla worth approximately $461 billion, making him the world’s wealthiest person with a net worth of about $473 billion according to 彭博社. If he unlocks the full compensation package, his stake would increase to approximately 27% of the company.

“I super appreciate it. Thank you, everyone,” Musk said after the vote was announced, according to NBC News. “What we’re about to embark upon is not merely a new chapter on the future of Tesla but a whole new book.”

After the announcement, Musk celebrated on stage at the shareholder meeting, dancing and laughing alongside a pair of Optimus robots.

The Vote Nobody Expected To Be Close

The compensation package was expected to pass, with betting markets giving it 93% odds of approval on Wednesday, according to NBC News. Tesla introduced the pay plan in September 2025, with Board Chair Robyn Denholm warning shareholders in late October that rejecting it could trigger Musk’s departure and send the company’s value into freefall.

Major proxy advisory firms Glass Lewis and Institutional Shareholder Services both recommended shareholders vote against the package, citing concerns about the total size of the award, shareholder dilution, and lack of mitigation of key person risk. Norway’s sovereign wealth fund, Tesla’s sixth-largest external investor, also voted against the plan.

“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,” Norges Bank Investment Management said in a statement reported by Fox Business.

Glass Lewis estimated that the entire S&P 500 combined paid all its CEOs about $9 billion last year, according to NPR. Using even conservative valuations, Musk’s package works out to roughly $88 billion over ten years, or $8.8 billion annually—nearly as much as every other major corporate CEO combined, before factoring in potential stock growth.

The Timing: European Sales Collapse On Vote Day

The shareholder vote occurred on the same day EVXL reported that Tesla’s October 2025 sales had collapsed across Europe. New vehicle registrations plummeted by double-digit margins in nearly every major market, with Sweden down 89%, Denmark down 86%, and Germany down 54% compared to the previous year.

The European sales crisis stems from three interconnected problems: stale product lineup, brand damage from Musk’s political activities, and fierce competition from Chinese manufacturers like BYD. While Tesla sales crater, BYD’s European registrations surged 272% year-over-year in recent months.

In the United States, Tesla faces a different but equally serious challenge. The September 30, 2025 expiration of the $7,500 federal EV tax credit—eliminated through President Trump’s legislative package—has sent the broader EV market into freefall. U.S. motor vehicle sales decreased 6.5% to a seasonally adjusted annualized rate of 15.3 million units in October, with electric vehicle sales dropping 24% in just one month.

Tesla managed to avoid the immediate impact by reporting record third-quarter deliveries of 497,099 vehicles—crushing Wall Street estimates of 447,000—as buyers rushed to purchase before the tax credit expired, according to Yahoo Finance. But that artificial spike pulled demand forward from future quarters, setting up what analysts warn will be a challenging fourth quarter and beyond.

The Robot Army And Control Concerns

Musk has repeatedly stated that the compensation package is less about money and more about maintaining control over Tesla and its future products, particularly the Optimus humanoid robot program.

“If I go ahead and build this enormous robot army, can I just be ousted at some point in the future? That’s my biggest concern,” Musk said in an October webcast with Wall Street analysts reported by NBC News. “I don’t feel comfortable building that robot army if I don’t have at least a strong influence.”

Tesla Board Chair Robyn Denholm echoed this sentiment in recent interviews. “It’s less about compensation and more about the voting influence,” she told CNBC.

The targets tied to the compensation package include delivering 1 million Optimus robots and 1 million robotaxis in commercial operation. Neither product is anywhere near commercial reality—Tesla’s robotaxi service launched in Austin with just 10-20 vehicles that still require safety drivers, and the Optimus robot remains in prototype stage with basic functionality challenges.

Why Investors Stuck With Musk Despite Everything

The shareholder vote represents a remarkable show of confidence in Musk despite significant brand damage throughout 2025. Tesla’s association with political controversies—including Musk’s work in the Trump administration’s Department of Government Efficiency and his support for far-right political groups in Europe—has alienated left-leaning consumers who historically formed the core EV buyer demographic.

French Tesla owners filed a lawsuit in June 2025 citing Musk’s political stances as damaging their peaceful use of their vehicles, with some owners reporting vandalism including swastikas painted on their cars. France saw Tesla sales drop 67% year-over-year in May 2024 following Musk’s political activities.

Yet Tesla’s stock has surged approximately two-thirds since May 2025, when Musk announced he was leaving the Trump administration, according to The Guardian. The stock rally reflects investor optimism about Tesla’s artificial intelligence and robotics ambitions, with analysts like Dan Ives of Wedbush Securities estimating Tesla’s AI-driven self-driving portfolio could be worth nearly $1 trillion alone.

“Musk is Tesla and Tesla is Musk,” Dan Ives, a managing director at financial firm Wedbush, told The Guardian. “Despite some of the brand damage Musk has caused to Tesla during his political stint, the AI future at Tesla depends on Elon.”

Another factor is the culture among U.S. investors of backing high-flying innovators and entrepreneurs. Mark Zuckerberg’s control of Meta has not been challenged, and Jeff Bezos enjoyed a long reign at Amazon before stepping down in 2021. Most Tesla shareholders seemed more concerned that Musk was devoting too little time to the company rather than wanting him to leave altogether.

“Money talks in the US more,” Neil Wilson, an investor strategist at financial trading platform Saxo Markets, told The Guardian. “The US has a far more entrepreneurial, free-wheeling, go-get-’em attitude so they are inclined to let innovators innovate. Plus Musk is a one-off – without him Tesla would be nowhere.”

The Disconnect Between Compensation And Business Reality

Critics argue the compensation vote reveals a fundamental disconnect between shareholder sentiment and Tesla’s actual business performance. The company faces declining deliveries, shrinking market share, and profit pressures largely attributed to Musk’s behavior driving customers away.

“He has hundreds of billions of dollars already in the company, and to say that he won’t stay without a trillion is ridiculous,” Sam Abuelsamid, an analyst at research firm Telemetry who has covered Tesla for nearly two decades, told Euronews. “It’s absurd that shareholders think he is worth this much.”

Shareholder advocate James McRitchie, who drives a Tesla, opposed the plan due to concerns about demand and profitability with the sunsetting of federal EV tax credits.

“Tesla has all these fanboys. So many retail investors bought the stock because they love the cars,” McRitchie told CNBC. “There’s a lot to love there, but you should also pay attention to the finances and risks.”

The compensation package requires Tesla to increase its market cap nearly sixfold to $8.5 trillion—larger than Apple and Microsoft combined—while delivering more than double the number of vehicles it has sold since the company’s founding. Achieving those targets while Chinese manufacturers like BYD aggressively expand globally and traditional automakers scale back EV investments presents extraordinary challenges.

EVXL’s Take

This compensation vote represents one of the most striking examples of investor psychology trumping business fundamentals in recent corporate history. Shareholders just approved paying Musk nearly a trillion dollars based on hitting science-fiction targets—1 million robots, 1 million robotaxis, an $8.5 trillion valuation—while the core automotive business that generates virtually all of Tesla’s revenue is hemorrhaging customers in Europe and facing a post-tax-credit demand cliff in America.

We’ve been tracking this story closely. Back in late October, Board Chair Robyn Denholm issued an urgent warning that Tesla could collapse into “just another car company” without this compensation package. But here’s the fundamental problem with that framing: if only Musk can save Tesla, why is Tesla dying under his leadership?

European sales data published the very day of the shareholder vote showed catastrophic declines—Sweden down 89%, Denmark down 86%, Germany down 54%. These aren’t just bad numbers; they represent a structural collapse driven by three factors that paying Musk more won’t fix: stale products, brand damage from his political activities, and brutal competition from Chinese manufacturers offering better technology at lower prices.

The compensation targets assume Tesla can grow from $1.4 trillion to $8.5 trillion in market cap—larger than Apple and Microsoft combined—while simultaneously delivering 20 million vehicles. For context, Tesla has delivered roughly 8 million vehicles total since its founding. The plan requires more than doubling that in just ten years while losing market share in Europe and navigating a U.S. market where federal EV tax credits expired September 30.

We predicted this would happen. When federal EV tax credits ended, we warned of demand collapse. It arrived right on schedule—U.S. vehicle sales cratered in October with EV sales plunging 24% in a single month. Tesla’s Q3 record deliveries were artificially inflated by customers rushing to beat the September 30 deadline, pulling forward demand that would have occurred in Q4 and beyond.

The robotaxi and Optimus robot targets sound ambitious, but they’re nowhere near commercial reality. Tesla’s Austin robotaxi pilot operates with 10-20 vehicles that still require safety drivers. The Optimus robot remains a prototype with basic functionality challenges. These aren’t realistic near-term business lines—they’re speculative moonshots that shareholders just agreed to pay for in advance with the largest compensation package in corporate history.

What Tesla actually needs isn’t a bigger carrot for Musk—it’s a fundamental strategic refocus on the automotive business. That means accelerating affordable model launches, meaningfully refreshing the Model 3 and Model Y with competitive technology, pricing aggressively to compete with Chinese manufacturers, and rebuilding brand reputation in Europe through both product excellence and, frankly, keeping the CEO out of divisive political controversies that alienate core customers.

The vote passed with 75% approval, but remember the context: Norway’s $1.8 trillion sovereign wealth fund voted against it. Glass Lewis and ISS—the two largest proxy advisory firms—recommended rejection. The opposition came from sophisticated institutional investors focused on fundamentals, while approval came largely from retail shareholders betting on Musk’s vision regardless of current business reality.

This story connects directly to our extensive coverage of Musk’s political distractions, Tesla’s retreat from Delaware to Texas to avoid shareholder accountability, and the broader industry collapse following tax credit expiration that’s now claiming thousands of jobs at GM, Rivian, and across the supply chain.

The compensation package essentially asks: should we reward spectacular failure and brand damage with nearly a trillion dollars based on achieving targets that require Tesla to become larger than Apple and Microsoft combined? Shareholders answered yes. Whether that bet pays off or becomes the most expensive corporate mistake in history remains to be seen.

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