Musk’s $1T Compensation Package Approved as Study Finds He Cost Tesla Millions of Sales
Gallery
Tesla’s shareholders approved a pay package for CEO Elon Musk that could be worth as much as $1 trillion over the next 10 years. The package is the largest compensation award in corporate history, and comes days after the publication of a paper suggesting that the CEO cost the company between 1 and 1.26 million sales since October 2022 because of his political involvements.
Musk’s pay package was approved with 75 per cent of the vote, including his own 15 per cent stake in the company. Developed and approved by Tesla’s board of directors — the same board that was found to be insufficiently independent by a Delaware judge who voided an earlier $56 billion pay package that is still being disputed in court — the plan requires the automaker’s value to rise as high as $8.5 trillion (up from its current valuation of $1.5 trillion).
The automaker will also have to reach 20 million cumulative sales under Musk’s leadership, a target that might have been easier without the executive’s recent political endeavours. A paper published by National Bureau of Economic Research last month found that the executive’s purchase of Twitter (now X) and his involvement with the Trump administration cost the company between 1 and 1.26 million vehicle sales — the equivalent of billions of dollars in revenue.
In its analytical model, the paper’s authors found that sales patterns for the company started shifting away from U.S. counties where Democratic voters were in the majority as Musk became involved with the social media platform and far right politics. These voters are, in general, more likely to buy electric vehicles (EVs) than Republicans and, indeed, the CEO’s actions appear to have pushed these buyers away from Tesla towards other automakers’ EVs.
Investors still believe that the company can grow rapidly, though. In a 90-minute speech to shareholders this week, Musk said that the future of the company will rely on its humanoid robot, Optimus, reports Automotive News. He promised that production would ramp up at the automaker’s Fremont, California, and Austin, Texes, production sites and claimed that the company could eventually produce “10s of billions of Optimus robots.”
Musk has frequently made outrageous claims about Tesla’s products, production, and sales that the company fails to follow through on. In the ramp up to the arrival of the Tesla Cybertruck, he claimed that the automaker would eventually make as many as 500,000 units per year. Production took much longer to get right than the company expected and last year, it sold just 11,000 Cybertrucks with demand already appearing to soften.
The CEO has also dangerously overstated the capabilities of Tesla’s advanced driver assistance systems in public. The abilities of those systems (Full Self-Driving and Autopilot) are another important pillar in Musk’s pay package, as the automaker targets 1 million deliveries of Tesla’s so-called Robotaxi, an allegedly fully autonomous vehicle the automaker showed in concept form last year.
The EVs Tesla actually produces will also face sales headwinds after the Trump administration, to which Musk donated hundreds of millions of dollars, ended federal incentives for zero-emission vehicles in the U.S. earlier this year.
