Tesla Gives Elon Musk a $1 Trillion Pay Package

Summary

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The Journal.: "Tesla Gives Elon Musk a $1 Trillion Pay Package"

Date: November 7, 2025
Hosts: Jessica Mendoza & Becky Peterson
Theme: Tesla shareholders approving a landmark $1 trillion pay package for CEO Elon Musk—why it happened, what it means for Tesla’s future, and the giant goals attached to Musk’s potential earnings.

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Episode Overview

This episode dives into Tesla’s flashy annual shareholder meeting in Austin, Texas, where a new, record-shattering $1 trillion pay package was approved for Elon Musk. Hosts Jessica Mendoza and journalist Becky Peterson break down the motivations behind this package, the response from investors, Musk’s wavering involvement in Tesla, and what needs to happen for Musk to actually earn the money. The team also explores Musk’s futuristic vision for Tesla beyond cars and the risks inherent in tying so much to a single figure.

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Key Discussion Points & Insights

1. The Spectacle at Tesla HQ

• Shareholder Meeting Atmosphere

  • Venue: Austin, Texas Gigafactory.
  • Staged event with blue and pink lights, and two dancing Optimus robots.
  • [00:26] "There was a group of invited shareholders at Tesla's Austin, Texas Gigafactory. And there was a stage set up with a bunch of blue and pink lights everywhere." — Becky Peterson

• The Vote

  • Main agenda: Approving Musk’s new $1 trillion pay package.
  • Over 75% of shareholders voted in favor.
  • Musk made a celebratory appearance, thanked the crowd, joined by dancing robots.
  • [01:58] “I super appreciate it. Thank you everyone.” — Elon Musk

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2. Why a $1 Trillion Package?

• Solving “The Elon Problem”
  • The board and some shareholders concerned Musk was distracted by other ventures (Xai, government task force, etc.).
  • Package designed to secure Musk’s attention and commitment through "moonshot" goals only he could achieve.
  • [01:04] "Primarily, they were trying to solve the problem of Elon being distracted by other companies... the package is designed to keep his attention.” — Becky Peterson

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3. The Pay Package Structure

• Not Upfront Cash—Performance-Based

  • Musk won't get the full $1 trillion unless extraordinary business targets are met.
  • [02:03] “But Musk doesn't get that trillion dollars on day one. Instead, it's tied to the company hitting so-called moonshot business goals, including growing Tesla into an $8.5 trillion company.” — Jessica Mendoza

• Twelve Tranches: Like a Video Game

  • Each tranche tied to both a $500 billion jump in Tesla’s market capitalization and a sales/product milestone.
  • Key targets:
    • Delivering 20 million cars
    • Selling a million humanoid robots
    • Deploying a million robo-taxis
    • Final goal: $8.5 trillion valuation and increased voting power (from 15% to 25%)
  • [10:03] “That's a great way to think about it. The package is divided into 12 tranches. Each of the 12 tranches is tied to a market cap goal.” — Becky Peterson

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4. The Shadow of Past Pay Packages and Legal Hurdles

• 2018 Mega Package and Delaware Lawsuit
  • Previous $56B Musk package was voided by a Delaware court, which said the approval was flawed due to Musk's influence.
  • Tesla held a revote—this time purely advisory and non-binding.
  • With Tesla's HQ move to Texas, new awards avoid Delaware jurisdiction, making legal challenges less likely.
  • [04:17] “In the beginning of 2024, the Delaware Court judge decided that the package was not fair to shareholders and rescinded it.” — Becky Peterson

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5. Tesla’s Performance and Shareholder Response

• A Year of Turmoil
  • Musk’s split focus led to concerns and visible customer pushback (protests, bumper stickers disowning Musk).
  • Significant business impact: 13% drop in global sales in the first half of 2025, profits down 71% in Q1.
  • A rebound in Q2 as customers hurried to buy before subsidy changes.
  • Notable institutional opposition: Norway's public pension fund, California pension funds, and others voted against the pay package.
  • [06:27] “Tesla owners were putting bumper stickers on their car saying, like, I bought this before Elon went crazy. There was a massive rebellion against the brand...” — Becky Peterson

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6. Why Is Musk Seen As Irreplaceable?

• Retail Shareholder Loyalty
  • Over 30% of Tesla’s shares are owned by individual investors deeply invested in Musk's persona and vision.
  • [08:12] “They believe in Musk the man, they believe in his companies. And in a lot of cases, you know, he can't do any wrong.” — Becky Peterson

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7. Musk’s Vision: Robo-Economy

• Beyond Cars to Robots

  • Musk envisions a future where humanoid robots, “the robot army,” revolutionize labor and the global economy.
  • He imagines a ten- to hundred-fold expansion of the global economy, with people effectively freed from traditional work.
  • [11:15] “With AI and robotics, you can actually increase the global economy by a factor of 10 or maybe 100. There's not like an obvious limit.” — Elon Musk

• Robots in Action—Today vs. Tomorrow

  • Peterson describes a Times Square demo robot: clunky and teleoperated, but improved models were showcased at the meeting.
  • Cars as we know them may disappear from Tesla's lineup in Musk’s vision—future vehicles would have no steering wheels or pedals.
  • [13:07] “He doesn't think people will be using cars the way that they do now. The cars that they have in the lineup, like, for the future, don't have steering wheels, don't have pedals, don't have side mirrors.” — Becky Peterson

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8. Risks, Doubts, and the Path Forward

• Tough Targets

  • Board chair Robyn Denholm emphasizes that these “moonshot” milestones are intentionally hard to reach.
  • No guarantee Tesla grows enough for Musk to collect the full amount.
  • [13:38] “She emphasized that these are moonshot goals. They're meant to be very difficult. ... she doesn't know that he will succeed.” — Becky Peterson

• If Musk Fails?

  • Tesla might become a smaller (but still massive) company; even partial achievement is “landing among the stars.”
  • [13:59] “It's a smaller company. $8.5 trillion market cap is still extraordinary.” — Becky Peterson

• Musk's Post-Vote Reflection

  • After the meeting, Musk posted: “Time to pull a lot of rabbits out of the hat.”
  • Peterson: “He paints a picture and he sells shareholders on a vision of the future. And it always seems like he can't do it. And then, oh, my God, suddenly he does it. Amazing.” [14:29]

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Notable Quotes & Memorable Moments

• [00:52] “It's definitely record setting. I don't think the world has any trillionaires.” — Becky Peterson
• [07:38] “If it is, you know, so key on just one person, key person risk, you know, that's a worry for me as a shareholder.” — California pension fund exec (paraphrased by Elon Musk)
• [11:26] “At Tesla in particular would be building these robots that are able to move around, work in factories, take care of babies. This is how he's described it. And he has started referring to this as his robot army.” — Becky Peterson
• [13:28] "It's worth noting it's not guaranteed that Musk will actually get the whole trillion dollars from this package." — Jessica Mendoza

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Timestamps for Important Segments

• Tesla's shareholder meeting spectacle: 00:05–01:32
• Pay package rationale and Musk’s attention: 01:32–02:16
• Package structure and milestones: 09:32–10:53
• Tesla's past pay controversy and move to Texas: 03:57–05:11; 08:40
• Tesla’s tumultuous year and public pushback: 06:12–06:49
• Shareholder opposition/American vs. global values: 07:08–07:47
• Musk’s vision for robots and economy: 10:53–13:07
• Practical demonstration of robots: 12:01–12:52
• Moonshot nature and possible outcomes: 13:28–14:20
• Final thoughts on Musk’s “rabbit out of the hat” management style: 14:20–15:21

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Conclusion

The Journal.’s deep-dive lays out not just the unprecedented scale of Musk’s new compensation package, but the reasons driving it: a vote of confidence, a bid to tie Musk’s energy to Tesla’s future, and a bet on “moonshot” transformation. With Tesla’s fate so closely linked to its mercurial CEO, the company’s future feels more audacious—and uncertain—than ever.

Transcript

[Becky Peterson]

Welcome back to Texas, the home of Tesla.

[Jessica Mendoza]

At Tesla headquarters in Austin, Texas, shareholders gathered yesterday for their annual meeting. It was a pretty flashy affair, similar to last year. Our colleague Becky Peterson covers Tesla and she watched a live stream of the event.

[Becky Peterson]

There was a group of invited shareholders at Tesla's Austin, Texas Gigafactory. And there was a stage set up with a bunch of blue and pink lights everywhere.

[Jessica Mendoza]

Two of Tesla's humanoid robots called Optimus danced on opposite ends of the stage. The main question at the meeting was whether shareholders would approve a new pay package for Musk worth $1 trillion.

[Becky Peterson]

It's definitely record setting. I don't think the world has any trillionaires.

[Jessica Mendoza]

And why would Tesla shareholders want to give Musk this much?

[Becky Peterson]

Primarily, they were trying to solve the problem of Elon being distracted by other companies. And we all saw earlier this year he went to Washington D.C. and worked on Doge. Then he spent summer really focused on Xai. The board has said explicitly this package is designed to keep his attention and that to keep his attention, he has to try to achieve a goal that no one else could do.

[Jessica Mendoza]

At yesterday's meeting, shareholders approved the package by a wide majority with over 75% voting in favor. Approved.

[Becky Peterson]

Elon Musk came on stage, he danced a little bit, the Optimus robot started dancing and it was this whole scene where he got to thank the crowd for passing his new pay package.

[Elon Musk]

I super appreciate it. Thank you everyone.

[Jessica Mendoza]

But Musk doesn't get that trillion dollars on day one. Instead, it's tied to the company hitting so called moonshot business goals, including growing Tesla into an $8.5 trillion company.

[Elon Musk]

I guess what I'm saying is hang on to your Tesla stock.

[Jessica Mendoza]

Welcome to the Journal our show Business and Power. I'm Jessica mendoza. It's Friday, November 7th. Coming up on the show, another record breaking pay package for Elon Musk.

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[Jessica Mendoza]

Thursday's vote is not the first time that Tesla shareholders have approved a major pay raise for Musk. In 2018, he was awarded a multi billion dollar pay package. But a shareholder filed a lawsuit in Delaware saying that the approval process was flawed because of Musk's influence over the board. That case wound its way through the.

[Becky Peterson]

Courts for years and in the beginning of 2024, the Delaware Court judge decided that the package was not fair to shareholders and rescinded it.

[Elon Musk]

According to a decision in a Delaware court, the Tesla chief executive's record breaking 56 billion. Yes, $56 billion pay award will not be reinstated.

[Becky Peterson]

Tesla tried to get around that decision. Last year they held a new shareholder vote on the same 2018 package, asking shareholders, if you could give it to him again, would you? It was basically like a popularity contest. It didn't have any sort of legal status. It didn't do anything to give him the package back.

[Jessica Mendoza]

Musk never received that full package though the board has given him a third of the shares as the court case continues.

[Becky Peterson]

The way that they see it, Musk hasn't been paid since then, since that pay package was canceled. And while that's still going through the appeal process in court, they were trying to solve the problem of our CEO hasn't been paid.

[Jessica Mendoza]

The record setting pay package is also meant to get Musk's attention. The billionaire spent the first part of the year leading the Department of Government Efficiency. And more recently he's focused on his artificial intelligence company, xai. Meanwhile, Tesla hasn't been getting a lot of love from Musk.

[Becky Peterson]

He spent a lot of time this summer at xai. As we reported, Tesla people would have to go to the XAI offices for their meetings. People in this universe know that he's splitting his time and even the board says like, they're not actually asking for time. What they're asking for is like his energy and his devotion and his like interest in the success of the company, which seemed to be waning for a lot of the last year.

[Jessica Mendoza]

And what has that meant for Tesla? Like, how is the company doing?

[Becky Peterson]

The first half of the year was really hard on Tesla sales and I reported on this a lot. There was a lot of controversy. People were sort of boycotting the company. People were protesting the company.

[Elon Musk]

Nobody voted For Elon Musk, nobody.

[Becky Peterson]

Tesla owners were putting bumper stickers on their car saying, like, I bought this before Elon went crazy. There was a massive rebellion against the brand, and we saw that in the sales numbers. In the first half of the year, sales fell more than 13% globally.

[Jessica Mendoza]

Tesla's profit also slid 71% in the first quarter of this year. But the company has somewhat bounced back as customers rushed to buy cars ahead of the end to EV subsidies in the US in the run up to the vote, some big shareholders expressed their opposition to such a huge pay raise for Musk.

[Becky Peterson]

There were a few shareholders who came out against the pay package before the vote. One was Norway's public pension fund. They answered to the people of Norway, and they have maybe slightly different values than other Tesla shareholders, but a lot of the U.S. public pension funds also came out against it.

[Elon Musk]

Maybe he is the visionary that the board thinks he is, but we don't know what could happen to anybody that's.

[Jessica Mendoza]

An executive from California state pension fund.

[Elon Musk]

And if it is, you know, so key on just one person, key person risk, you know, that's a worry for me as a shareholder.

[Jessica Mendoza]

Musk threatened to leave Tesla if the pay package didn't get approved. In response to a post on X criticizing the plan, he pointed out how valuable Tesla is compared to other car companies. And he wrote, quote, which of those CEOs would you like to run Tesla? Why is Musk so valuable? Like, is he really the only person who can lead Tesla?

[Becky Peterson]

That's how they see it. Tesla's in a unique situation compared to other publicly traded companies in that more than 30% of its shareholders are retail investors. So these are just individuals who are, you know, putting their money in, a lot of times putting all of their money in. And they're really excited by it. They believe in Musk the man, they believe in his companies. And in a lot of cases, you know, he can't do any wrong.

[Jessica Mendoza]

Yesterday, 75% of the Tesla shareholders who voted cast a yes on the pay package. And unlike the last pay package, this one probably won't get snarled up in court. That's because Tesla relocated its headquarters to Texas. And so the company isn't under the jurisdiction of that Delaware court anymore. But for Musk, there's a long road to a trillion dollars. What he has to do and what it means for the future of Tesla is next. Musk's new pay package is made up of chunks of stock, and to get each one, he has to reach certain targets.

[Becky Peterson]

The board set goals that would require him to actually create operational growth. So he has to grow Tesla's profits and he has to grow its sales of a few key products.

[Jessica Mendoza]

And so does he have to, like, practically speaking, how does it work? Like, does he have to hit all the goals at once? Is there an option to choose which goals he wants to hit at any given time? And what does he get for each goal achieved? It's almost like a video game.

[Becky Peterson]

That's a great way to think about it. The package is divided into 12 tranches. Each of the 12 tranches is tied to a market cap goal.

[Jessica Mendoza]

To unlock a tranche of shares, Musk needs to grow Tesla's market cap by $500 billion or more and also hit one of a series of sales milestones, which include delivering 20 million cars, selling a million robots, and getting a million robo taxis on the road. The final goal is to get Tesla to that $8.5 trillion valuation over the next 10 years. If Musk does that, he gets to level up his voting power from 15% to 25%. He's already the largest shareholder in the company. Just big picture, stepping back, what does the future of Tesla look like? As far as Musk is concerned?

[Becky Peterson]

If he's successful, robots will be ruling the world. And I think the idea is that humanoid robots will supercharge the economy and there will be so much wealth creation that humans won't need to work and we'll all just live as like, very wealthy people in an economy that's supported by humanoid robots.

[Elon Musk]

With AI and robotics, you can actually increase the global economy by a factor of 10 or maybe 100. There's not like an obvious limit.

[Becky Peterson]

That's obviously not what our world looks like right now. And he, at Tesla in particular would be building these robots that are able to move around, work in factories, take care of babies. This is how he's described it. And he has started referring to this as his robot army.

[Jessica Mendoza]

I mean, I guess a guy with that many kids could use a robot army, I don't know.

[Becky Peterson]

Yeah, most people don't need as many babysitters.

[Jessica Mendoza]

Totally. Have you used or interacted with any of these robots at this point?

[Becky Peterson]

When the board was promoting the pay package, they brought an older version of Optimus to New York's Times Square. And I stood in line and got handed a Snickers bar as part of their like, Halloween candy candy moment. This was an older one, so it's not like the most up to date technology, but, like, it was a little clunky and it was Also teleoperated by someone behind the scenes. And you could hear a little bit of, like, the gears churning. And then I stuck around and got to watch it leave its post. And it walks like two inches at a time.

[Jessica Mendoza]

Wow.

[Becky Peterson]

But then when they demoed the robots on stage last night, dancing, it moved a lot more like a human than the one that I saw in Times Square.

[Jessica Mendoza]

I guess dancing is the first step, and then you can start cleaning. Do electric cars play a role in Musk's vision for Tesla at all? Besides the robo taxis, he just doesn't.

[Becky Peterson]

He doesn't think people will be using cars the way that they do now. The cars that they have in the lineup, like, for the future, don't have steering wheels, don't have pedals, don't have side mirrors. Like, he's not designing cars that people are buying today. So again, to hit these goals, the world is going to have to change a little bit.

[Jessica Mendoza]

It's worth noting it's not guaranteed that Musk will actually get the whole trillion dollars from this package. Becky spoke to Tesla's board chair, Robyn Denholm about this.

[Becky Peterson]

She emphasized that these are moonshot goals. They're meant to be very difficult. And, you know, she said people are talking about it as if he's going to succeed, but, like, she doesn't know that he will succeed.

[Jessica Mendoza]

And if Musk isn't able to hit the milestones, what does that mean for Tesla?

[Becky Peterson]

It's a smaller company. $8.5 trillion market cap is still extraordinary.

[Jessica Mendoza]

Yeah, it's a big number.

[Becky Peterson]

I think Nvidia just hit 5 trillion. It's a big number. Like, they could land, as they say, with moonshots. They could land among the stars and still have grown quite a bit.

[Jessica Mendoza]

So after the meeting, Musk posted on X. Time to pull a lot of rabbits out of the hat. What do you take that to mean?

[Becky Peterson]

Oh, no, he doesn't think he can do it. It's funny to me because I listen to him talk every quarter. He paints a picture and he sells shareholders on a vision of the future. And it always seems like he can't do it. And then, oh, my God, suddenly he does it. Amazing. Where he gets credit is for, like, coming up with the vision and for encouraging people to help his companies actually reach these unbelievable goals. So this is another example of that. These goals would be transformational for Tesla. There's no guarantees, but now he's incentivized to try.

[Jessica Mendoza]

That's all for today. Friday, November 7th. Additional reporting in this episode by Teo Francis, Emily Glaser, Rubber Gin, Alexander Saidi and Gareth Vipers. The Journal is a co production of Spotify and the Wall Street Journal. The show's made by Kathryn Brewer, Pia Gidkari, Rachel Humphries, Isabella Japal, Sophie Kodner, Ryan Knudsen, Matt Kwong, Colin McNulty, Annie Minoff, Laura Morris, Enrique Perez de la Rosa, Sarah Platt, Allen Rodriguez Espinosa, Heather Rogers, Pierce Singhy, Jeevika Verma, Lisa Wang, Catherine Whelan, Tatiana Zemis and Melissa Jessica Mendoza. Our engineers are Griffin Tanner, Nathan Singapak and Peter Leonard. Our theme music is by so Wiley. Additional music this week from Katherine Anderson, Peter Leonard, Bobby Lord, Emma Munger, Nathan Singapak and Blue Dot Sessions. Fact Checking this week by Mary Mathis. Thanks for listening. See you on Monday.