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.

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.

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

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

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

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

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

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

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

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]

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

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

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.