Tesla shareholders voted in favor of reinstating Elon Musk’s $1 trillion compensation plan, originally approved in 2018 but later struck down by a Delaware court earlier this year. The vote, held during Tesla’s special shareholder meeting, demonstrated strong investor confidence in Musk’s leadership and his ability to drive Tesla’s long-term growth. The plan’s reinstatement underscores the company’s dependence on Musk’s strategic vision and market influence.

Background: The Legal Battle Over Musk’s Pay

Earlier in 2025, a Delaware judge voided Musk’s compensation package, calling it “unfair” and “excessive.” The ruling cited concerns about Tesla’s board independence and Musk’s outsized control over company decisions. However, Tesla’s board quickly called for a re-vote, arguing that shareholders — not courts — should decide Musk’s pay. With this latest approval, Tesla intends to appeal the earlier court decision and reinstate the plan in full.

Details of the Compensation Structure

The pay package, first introduced in 2018, ties Musk’s earnings exclusively to Tesla’s performance targets, such as market capitalization, revenue growth, and profitability milestones. Musk doesn’t receive a traditional salary or cash bonus; instead, he earns stock options upon achieving specific business goals. When fully vested, these options could be worth over $1 trillion — provided Tesla continues its market dominance in electric vehicles, battery technology, and AI-driven mobility.

Shareholder Sentiment and Market Reaction

Investor reactions have been mixed. While many see Musk as the irreplaceable driving force behind Tesla’s success, critics argue that the compensation is excessive and reflects a lack of corporate accountability. Despite the controversy, Tesla’s stock rose modestly following the announcement, signaling market optimism about Musk’s continued involvement and the company’s growth trajectory.

What’s Next for Tesla and Musk

With shareholder approval secured, Tesla plans to use the vote as leverage in ongoing legal proceedings to restore Musk’s compensation package. Analysts believe this victory could strengthen Musk’s position across his other ventures, including SpaceX, Neuralink, and xAI. Meanwhile, corporate governance experts warn that this case could set a new precedent for executive pay across the global tech industry.