Musk could become world’s first trillionaire as Tesla shareholders approve huge pay package
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The world’s richest man was given a chance to become the first trillionaire in history.
Elon Musk won a shareholder vote on Thursday that will give the Tesla CEO $1 trillion in stock if he hits certain performance targets over the next decade.
The vote followed weeks of debate over his management record at the electric car maker and whether anyone deserves such an unprecedented salary, with everyone from small investors to giant pension funds and even the Pope commenting sharply.
In the end, more than 75 percent of voting shareholders gathered at the company’s Austin, Texas headquarters approved the plan.
“Fantastic group of shareholders,” Musk said after tallying the final votes, “hold on to your Tesla stock.”
The vote is a resounding victory for Musk, showing that investors still have confidence in him as Tesla itself struggles with low sales, declining market share and profits due to Musk.
Car buyers have fled the company this year after it waded into politics and trafficked in conspiracy theories in both the US and Europe.
The vote comes just three days after a report from Europe that Tesla car sales declined again last month, including a 50 percent drop in Germany.
Still, many Tesla investors consider Musk the kind of charismatic figure who is capable of amazing business feats, such as when he pulled Tesla from the brink of bankruptcy a half-dozen years ago and turned it into one of the world’s most valuable companies.
Musk has to meet the target
The vote has cleared the way for Musk to become a trillionaire by giving him new shares, but it will not be easy.
The board of directors, which chalked out the pay package, has asked him to achieve several ambitious financial and operational targets, including increasing the company’s value in the stock market to almost six times its current level.
Musk also aims to bring 20 million Tesla electric vehicles to market over the next 10 years — more than double the number since the company’s inception — amid stiff competition.
Elon Musk is already the world’s richest person, but he could become the world’s first trillionaire if his company Tesla meets the targets set in the pay plan announced by the electric car company.
He also has to deploy his more than 1 million human-like robots, which he promised would replace work and the home – he calls it his “robot army” – from zero today.
Musk could add billions of dollars to his wealth over a few years by partially meeting these goals, according to various intermediate steps, which would hand him newly minted stock in the company as he gets closer to the final goal.
This could help him eventually surpass John D. Rockefeller, widely considered America’s richest man of all time.
The railroad titan is worth $630 billion in today’s dollars, according to Guinness World Records, at the peak of his wealth 110 years ago. According to Forbes magazine’s estimate, Musk is worth $493 billion.
critics blast package
Musk’s victory came despite opposition from several big funds, including CalPERS, the largest US public pension, and Norway’s sovereign wealth fund.
Two corporate watchdogs, Institutional Shareholder Services and Glass Lewis, also criticized the package, which angered Musk so much that he called them “corporate terrorists” at a recent investor meeting.
Critics argued that the board of directors was too beholden to Musk, that his behavior recently was too reckless and that the money offered was too high.
Supporters say Musk needs to be encouraged to focus on the company as he works to transform it into an AI powerhouse, using software to operate hundreds of thousands of self-driving Tesla cars — many of which are without a steering wheel — and Tesla robots deployed in offices, factories and homes, performing many of the tasks now handled by humans.
Investors who voted for the payout had to consider not only Musk’s promise of a bold, new tomorrow, but also whether he might ruin things today: He threatened to walk away from the company, which investors feared would send the stock into a tailspin.
As it turned out, Tesla shares, already up 80 percent over the past year, rose 1.5 percent on news of the vote, to $447.27 in after-hours trading.
For his part, Musk says the vote wasn’t really about money, but about acquiring a greater stake in Tesla — it would double to about 30 percent — so he could have more power over the company.
He said this is a serious concern given Tesla’s future “robot army” and suggested he did not trust anyone else to take control given the potential threat to humanity.
