Tesla (NYSE: TSLA) held its 2025 Annual Shareholder Meeting yesterday, whose key takeaway was overwhelming shareholder approval of a colossal new performance-based compensation package for CEO Elon Musk, a plan that could potentially make him the world’s first trillionaire if all targets are met.

Shareholders Approve Musk’s Tesla Pay

This historic pay award, supported by over 75% of voters, is tied to achieving extremely ambitious operational and financial milestones over the next decade. These include

• Market Capitalization: Tesla’s market value, currently around $1.1 trillion, would need to skyrocket to at least $8.5 trillion for Musk to unlock the full payout.
• Vehicle Production: The company must achieve an annual vehicle delivery rate of 20 million, a nearly tenfold increase from its current levels.
• Robotics and AI: The plan includes targets for the deployment of 1 million “robotaxis” and 1 million of the company’s humanoid “Optimus” robots.
• Profitability: Financial goals are equally aggressive, with adjusted EBITDA needing to increase from approximately $17 billion to $400 billion.

The compensation would be awarded in a series of tranches, with each payout contingent on a combination of market capitalization and operational milestones. To receive any of the shares, Musk would need to remain with the company for at least 7.5 years, with the full package requiring a 10-year commitment.

Meanwhile, even if Tesla meets some of the easier targets, Musk could end up earning tens of billions of dollars. Musk incidentally does not get any salary or bonus at Tesla, and all his compensation is tied to stock awards.

Tesla Chair Had Called Upon Shareholders to Approve Musk’s Compensation

Tesla chair Robyn Denholm had called upon shareholders to vote for the $1 trillion compensation that the board has recommended for CEO Elon Musk, failing which he might not stay with the company.

In her letter last month, Denholm said that Tesla is at a “critical inflection point,” and stressed that the key question for shareholders is whether they “want to retain Elon as Tesla’s CEO and motivate him to drive Tesla to become the leading provider of autonomous solutions and the most valuable company in the world?”

She added, “When negotiating this performance award, we necessarily considered what Tesla’s future without Elon would look like, and we did not believe it was the future that our shareholders deserve.”

Notably, Tesla has been pivoting to artificial intelligence (AI) products like autonomous driving and humanoids. Musk has said several times that these products will drive the real value for Tesla shareholders.

Musk Believes TSLA Could Become the Most Valuable Company Ever

While previously Musk said that Tesla would be more than the combined worth of Apple and Saudi Aramco, he has since been making even bolder predictions, and last year said that the company’s Optimus humanoid would make it a $25 trillion company. However, many Wall Street analysts don’t share Musk’s optimism and see the stock as highly overvalued.

In her letter, Denholm said, “At a time when companies—both big and small—are competing to be the first to bring groundbreaking AI technologies to market, we could not risk losing the best leader in the industry to put Tesla on top. Now is a pivotal moment for our company to emerge as a leader in AI, and with our exceptional CEO at the helm, we are perfectly positioned to seize it.”

Musk Repositions Tesla As an AI Play

The annual shareholder meeting served as a pivot point, with Musk fundamentally repositioning Tesla as a leader in AI and Robotics, beyond its role as an electric vehicle manufacturer. The most ambitious product reveal was the Cybercab, the fully autonomous robotaxi designed without a steering wheel, pedals, or side mirrors. Musk confirmed that mass production is scheduled to begin in April 2026 at Gigafactory Texas, with the staggering goal of achieving a 10-second cycle time per vehicle on the production line, six times faster than the Model Y. This manufacturing efficiency is intended to allow for an annual production capacity of up to 2-3 million units, which is central to Tesla’s objective of deploying 1 million robotaxis in commercial service as part of Musk’s long-term compensation milestones.

Optimus Humanoid Progress

Crucially, the vision for the Optimus humanoid robot was significantly amplified. Musk stated the robot represents the future of the company, announcing the incredibly ambitious target of 1 million units delivered to meet one of his $1 trillion pay package requirements over the next decade. He projected that once production scales, the cost of an Optimus unit could be controlled to approximately $20,000, making it an affordable product that would dramatically expand Tesla’s economic scale. The robot’s debut performance, where it danced alongside Musk, was presented as a precursor to a future where Optimus could “eliminate poverty” and perform complex tasks, potentially better than humans.

Musk Says Tesla Might Need to Build a Massive Chip Fabrication Plant

Finally, the discussion of advanced hardware highlighted a shift towards vertical integration in AI compute. Musk revealed details about the next-generation AI5 chip, designed to power the advanced autonomous systems of the Cybercab and Optimus. Acknowledging that the projected needs for this chip far exceed the capacity of current suppliers like TSMC and Samsung, Musk stated Tesla would likely have to construct its own massive chip fabrication facility, which he coined a “terafab.” This facility would be necessary to produce chips at the required volume and would be optimized for power efficiency, consuming roughly a third of the power of competitors’ flagship AI chips at a fraction of the cost.

Musk on AI’s Impact

Musk sees AI having a profound impact on the global economy. At the shareholder meeting, the world’s richest person commented, “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.”