Tesla shareholders have approved what has now become the most valuable compensation package in corporate history — a potential $1 trillion payout for CEO Elon Musk.

The decision came during Tesla’s annual general meeting at the company’s Austin, Texas, factory, where Musk took the stage to cheers and dancing robots. The board had urged shareholders to approve the package, saying it was designed to “retain and motivate Musk” as Tesla faces growing competition in the electric vehicle market and investor unease over his distractions with other ventures, including SpaceX, X (formerly Twitter), and xAI.

The board argued that the pay deal, significantly larger than the $50 billion proposed in 2018 but was struck down earlier this year by a Delaware judge, was never about enriching Musk but about “pushing the limits” of Tesla’s growth potential. It linked the payout entirely to performance milestones — both in revenue and market capitalization — that, if met, would drive Tesla’s valuation to around $8.5 trillion, making it by far the world’s most valuable company.

Last month, Tesla Chair Robyn Denholm, in a letter to shareholders, said the electric carmaker was at a “critical inflection point” and that rejecting the package would jeopardize Tesla’s leadership in artificial intelligence and robotics.

“The fundamental question for shareholders at this year’s Annual Meeting is simple: Do you 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?” Denholm wrote.

Analysts divided on logic of trillion-dollar reward

While the board’s rationale resonated with investors — more than 75% voted in favor — analysts offered sharply contrasting takes on what the package means for Tesla’s future.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said the scale of the reward is “outrageous,” but the conditions attached to it make sense.

“Musk earns nothing unless he creates staggering value,” Britzman said. “For shareholders, it’s the ultimate alignment. If he pulls off the unimaginable, investors will be sitting atop an $8.5 trillion titan.”

Mike O’Rourke, chief market strategist at Jones Trading, praised Musk’s track record but questioned the optics.

“There’s no doubt Musk can execute the impossible in the business world,” he said. “But with Tesla’s EV business slowing, we’re surprised he hasn’t abandoned ship to focus on his private companies. For that reason alone, it was worth it for shareholders to grant the package. Still, when a $1.5 trillion company has to award a $1 trillion pay deal to the richest man alive, it’s hard to see that ending well.”

Chris Beauchamp, chief market analyst at IG Markets, said the plan isn’t an immediate financial burden because it’s performance-based.

“If he grows the company to $8.5 trillion, the questions will answer themselves in due course,” Beauchamp said. “But the concern is whether Musk can give Tesla the full attention it needs while spinning so many other plates.”

Russ Mould, investment director at AJ Bell, said most shareholders likely saw little downside.

“If Musk hits those demanding targets, everyone wins. If not, he gets nothing,” Mould said. “It’s a high-stakes gamble that reflects the cult of personality surrounding Musk.”

However, some experts believe the deal inflates unrealistic expectations. Brian Dunn, director of the Institute for Compensation Studies at Cornell University, argued that Tesla’s valuation already rests on speculative optimism.

“Is Elon Musk an extraordinary individual? Yes,” Dunn said. “Does the stock price reflect a reasonable multiple of earnings? No. The value of Tesla stock is based on faith that something extraordinary will happen. But is that worth $1 trillion of shareholders’ money? I think not.”

The pay deal symbolizes more than corporate excess — it underscores Tesla’s dependence on Musk’s vision. The board’s message was clear: retaining Musk is essential to Tesla’s identity and long-term growth. Yet the decision also revives questions about whether the company has become too intertwined with one man’s persona.

Rivian’s board has approved a new compensation package for CEO RJ Scaringe worth as much as $4.6 billion over the next decade — a move that mirrors Tesla’s headline-grabbing $1 trillion pay plan for Elon Musk.

The decision underscores how Musk’s compensation structure has become a model for high-growth companies seeking to tie executive rewards to ambitious performance targets and shareholder value creation.

Rivian said the plan aims to retain its founder while keeping him focused on profitability and expansion as the company prepares to roll out its smaller, more affordable R2 SUV next year. The R2 is expected to compete directly with Tesla’s Model Y, one of the world’s best-selling electric crossovers.

The company’s decision comes amid broader financial pressure on electric vehicle makers. Rivian has struggled with slowing sales following the removal of key U.S. EV tax credits and has recently laid off about 600 workers — roughly 4.5% of its workforce — to reduce costs.

According to Reuters, the new incentive plan replaces a previous one that Rivian’s board said was unlikely to be met under current market conditions.

Under the revised plan, Scaringe will receive options to purchase up to 36.5 million shares of Rivian’s Class A stock at an exercise price of $15.22 each — the same as Thursday’s closing price. The award will vest if the company meets stock price milestones ranging from $40 to $140 per share over 10 years, alongside new operating income and cash flow goals over seven years. The thresholds are notably lower than the previous pay package approved in 2021, which required share prices to hit $110–$295 per share. Rivian canceled that deal after concluding the targets were unrealistic.

At full vesting, the new package represents about 3% of Rivian’s shares. Scaringe already owns around 2% of the company, while Musk controls about 13% of Tesla, a stake that could rise to 25% under his newly approved plan.

“RJ’s starting position makes this package much more reasonable than Musk’s,” said Vitaly Golomb, managing partner at Mavka Capital and a Rivian investor.

Tesla’s board has argued that Musk’s massive $1 trillion package, approved last week after months of controversy, was essential to keep him focused on driving the company’s value toward an $8 trillion valuation. Analysts note that Rivian’s plan, though much smaller, draws clear inspiration from Tesla’s structure, linking extraordinary rewards to equally ambitious performance.

“While Rivian may not be a direct copycat, there are definitely Elon Musk characteristics that are similar,” said Yonat Assayag, a partner at ClearBridge Compensation Group. “It’s not to keep up with Musk, but inspired by Musk’s award.”

Rivian said shareholders will gain $153 billion in value if the company hits all the milestones as part of the package, while Reuters’ calculation showed that Scaringe will get up to $4.6 billion, including the costs of exercising options.

However, not everyone is convinced that such ambitious pay designs will pay off. Amit Batish, director at research firm Equilar, noted that “while these packages sound attractive, they don’t always work out. Many CEOs struggle to hit the targets due to changing policies and economic headwinds.”

In addition to the stock-based incentives, Rivian’s board has doubled Scaringe’s base salary to $2 million, aligning his compensation more closely with shareholder returns. The automaker said the revised structure was crafted with input from an independent consultant.

Rivian also announced that Scaringe will chair the board of Mind Robotics, a new spinoff backed by external investors to develop industrial AI systems. The CEO has been granted 1 million common units in the venture, representing up to a 10% stake once profitability thresholds are met.

The new plan marks Rivian’s bid to reward long-term execution rather than short-term market performance. But as the EV industry faces intensifying competition, high borrowing costs, and uncertain demand, analysts say it will test whether tying billion-dollar compensation to future milestones can truly motivate sustainable growth — or simply replicate the high-risk model that made Tesla’s rise so polarizing.