Tesla Investors Approve Musk’s $878 Billion Bumper Pay Plan
London-UK, November 12, 2025
In a dramatic and highly publicised shareholder vote, investors in Tesla have overwhelmingly approved the controversial, and potentially massive, $878 billion pay package for CEO Elon Musk. The result ends a protracted and bitter legal and corporate governance battle over the compensation plan, which was originally voided by a Delaware court earlier this year.
The approval, announced at the annual shareholder meeting, is a resounding victory for Musk and the company’s board, sending a powerful message of shareholder confidence in the charismatic yet polarising leader.
However, the fight is far from over, as the approved package now faces a crucial second legal challenge back in the Delaware Chancery Court, where the presiding judge has already ruled the original deal was unfairly derived and lacked proper disclosure.
Key Headlines
Compensation Scale:
The package, valued at the time of the vote at an estimated $878 billion, is the largest executive compensation plan in corporate history, tying Musk’s payout directly to massive market capitalisation and operational milestones.
Reaffirmed Mandate:
The vote is seen as a re-endorsement of Musk’s leadership by the company’s retail shareholders, who own a majority of the stock and largely followed Musk’s public campaigning for approval.
Delaware Showdown:
The vote does not automatically reinstate the package; it merely provides the company with a powerful new legal argument to overturn the prior voiding decision by the Delaware Chancery Court.
Corporate Governance Concerns:
Institutional proxy advisors and critics maintain that the package represents a gross overpayment and lacks proper corporate governance oversight, arguing the vote was heavily influenced by Musk’s outsized control.
The vote followed weeks of intense campaigning by both Elon Musk and Tesla’s board, with the CEO personally appealing to the company’s massive base of retail investors through social media platforms.
The compensation package is structured not as a salary, but as a complex performance-based award of stock options that vest only if Tesla achieves a series of ambitious market value and operational targets. The final market capitalisation target that triggers the full payout is a staggering $650 billion, a threshold that the company has now repeatedly exceeded.
The urgency for a new vote arose earlier this year when a Delaware judge, following a challenge from a retail investor, voided the original 2018 package.
The judge’s ruling determined that the board of directors that negotiated the deal was not sufficiently independent of Musk and that the full details of the process were not properly disclosed to the shareholders at the time of the initial vote.
This new vote was designed specifically to address the judge’s concerns about shareholder approval, aiming to demonstrate that the current shareholders, fully informed, unequivocally support the package.
The board of directors hailed the results as a “historic affirmation” of Musk’s unparalleled value to the company.
Robyn Denholm, Tesla’s Chairperson, stated in a release that the shareholders have voted “loudly and clearly” to show that they believe Musk’s vision and performance are worth the unprecedented financial reward.
The board views the overwhelming approval as a crucial piece of evidence that the court must now consider, arguing that the shareholders have ratified the agreement with open eyes and full transparency.
However, proxy advisory firms and corporate governance experts remain staunchly opposed. Institutional Shareholder Services (ISS) and Glass Lewis, which influence the voting decisions of major funds, had both recommended against the approval.
They argued that the sheer size of the package—which represents a massive transfer of value from the company to a single executive—is unnecessary to motivate Musk, who is already the world’s wealthiest person, and sets a dangerous precedent for executive compensation worldwide.
Critics also point out that the vote may have been heavily skewed by the loyalty of individual retail investors, whose investment decisions are often emotionally tied to Musk’s public persona.
The focus now shifts back to the Delaware Chancery Court. While the massive shareholder approval provides Tesla’s legal team with a powerful argument—that the package has been fully and transparently ratified—the presiding judge has the ultimate authority.
The judge’s earlier ruling was based on the fairness of the original negotiation process, not just the shareholder vote. The question before the court will be whether this subsequent vote is sufficient to retroactively cleanse the prior legal defects, or if the court will maintain its original stance against the package’s perceived overreach and lack of independence in its creation.
Until that final legal decision, the $878 billion compensation plan remains in a state of suspended animation.
