SAN FRANCISCO, Nov. 6 (Xinhua) -- Tesla said Thursday that its shareholders had approved a performance-based pay package worth up to 1 trillion U.S. dollars for CEO Elon Musk at the company's annual shareholders' meeting in Austin, Texas.
The pay package, with more than 75 percent of the votes in favor, was approved by Tesla's board in early September and authorized to be submitted for shareholder approval.
Under the plan, Musk's award will be granted in 12 tranches based on Tesla's market capitalization and operational performance milestones.
Musk will receive the first tranche once Tesla's market value reaches 2 trillion dollars. For each additional 500 billion dollar increase in market capitalization up to 6.5 trillion dollars, he will earn nine more tranches. If the company's valuation continues to rise by 1 trillion-dollar increments to 8.5 trillion dollars, two additional tranches will be awarded.
The operational targets include achieving annual adjusted profit of 50 billion dollars, ultimately reaching 400 billion dollars; delivering a cumulative total of 20 million vehicles; reaching 10 million active Full Self-Driving (FSD) subscriptions; delivering 1 million Optimus humanoid robots; and deploying 1 million fully autonomous robotaxis for commercial operation.
According to Tesla, the company has so far delivered over 8 million vehicles, and its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in the third quarter amounted to 4.2 billion dollars.
The plan also defines a series of "covered events" -- special circumstances such as force majeure or regulatory changes -- under which performance evaluations may be adjusted if external factors materially affect the company's operations.
U.S. media reported that the thresholds set in the package are extremely demanding and unlikely to be reached in the near term. To obtain all 12 tranches, Musk would need to remain at Tesla for many years and drive its long-term growth. If fully realized, his ownership stake would rise from about 13 percent to 25 percent, an increase of approximately 423.7 million shares. Tesla's current market capitalization is around 1.5 trillion dollars.
Another proposal at the meeting called for allowing Tesla to invest in xAI, an artificial-intelligence startup founded by Musk to compete with OpenAI. Tesla's General Counsel Brandon Ehrhart said the proposal received a majority of favorable votes in a non-binding advisory vote, and the company will consider next steps. ■