Elon Musk is officially on his way to being a billionaire

Tesla shareholders on Thursday afternoon approved a new executive pay package that will give Musk nearly $1 trillion in stock over the next decade, a record deal for the world’s richest man.

The overall valuation depends on whether Musk can meet ambitious performance goals for the struggling electric vehicle company, including raising Tesla’s market capitalization to $8.5 trillion — a more than 500% increase from today’s valuation. The goals also include delivery of 20 million Tesla vehicles and 1 million robots in addition to 1 million robotic axes in commercial operation.

“While we believe Elon is the only person capable of leading Tesla at this critical inflection point, changing the world is not an overnight process or the work of one person,” Tesla’s board of directors wrote in a letter to shareholders in August. “So we also want your help in securing the team and the strategies needed to achieve goals that others may perceive as impossible, but that we know are possible for Tesla.”

Musk’s net worth is estimated at around $473 billion.

Reining Musk back

If all goes according to plan, Musk’s stake in Tesla will rise from around 13% to nearly 29% – the level of control he has long sought.

Having voting control in the “middle 20” percent range would help ensure “strong influence,” but gives shareholders enough control to fire him if he “goes crazy,” Musk said during Tesla’s earnings call last month.

“It’s called compensation, but it’s not like I’m spending the money,” Musk added. “It’s just that if we build this robot army, do I at least have strong influence over that robot army, not current control, but strong influence? That’s what it’s all about in a nutshell. I don’t feel comfortable controlling that robot army if I don’t have at least strong influence.”

Tesla shares fell as much as 43% between January and March as Musk devoted much of his time to running the Department of Government Efficiency (DOGE). The stock has recovered since the move back, rising 16% year-to-date.

Many shareholders hope the new incentives will keep Musk focused on Tesla.

Ron Baron, founder and CEO of Baron Capital, which owns a 0.39% stake in Tesla, said in a post on X that he supports the plan because Tesla wouldn’t exist without Musk.

“Elon is the ultimate ‘key man’ of key man risk,” Baron wrote. “Without his tireless driving and uncompromising standards, there would be no Tesla.”

From Pope Leo to Norway’s sovereign wealth fund, Musk’s pay package has had its detractors

Not every Tesla investor was on board with the extravagant deal.

Glass Lewis and ISS, two proxy advisory services, urged Tesla shareholders to vote against the proposal, with the latter group citing “unmitigated concerns” with its size and design. Musk then fired back during Tesla’s earnings call in October, calling them “corporate terrorists.”

Meanwhile, Norges Bank Investment Management, the group behind Norway’s $2 trillion sovereign wealth fund, which holds a 1.14% stake in Tesla, said it had voted against the pay package.

“While we appreciate the significant value created within Mr. Musk’s visionary role, we are concerned about the overall award size, dilution and lack of key person risk mitigation — consistent with our views on executive compensation,” the group said in a statement this week.

Pope Leo XIV, while not a Tesla investor, also recently expressed his concern about the message Musk has sent to become a billionaire — and the growing gap between rich and poor.

“CEOs who 60 years ago could earn four to six times what workers get, the last number I saw is 600 times what average workers get,” the pope told the Catholic news site Crux in an interview published in September.

“Yesterday came the news that Elon Musk will be the world’s first billionaire: What does that mean and what is it about? If that’s the only thing that has value anymore, then we’re in big trouble.”

A recent report from Oxfam found that the 10 richest Americans — which include Musk and Oracle co-founder Larry Ellison, Amazon co-founder Jeff Bezos and Meta CEO Mark Zuckerberg — earned $69.8 billion over the past year. That’s 833,631 times more than the typical American household takes home.

While Musk still falls short of John D. Rockefeller’s $630 billion fortune adjusted for inflation, meeting his new performance goals could make him the richest person in modern history.