Shares of Tesla rose about 1 per cent in after-hours trading. The proposal was approved with over 75 per cent support.
The vote, analysts have said, is a positive for Tesla's stock, the valuation of which hangs on Musk's vision of making vehicles drive themselves, expanding robotaxis across the US and selling humanoid robots, even though his far-right political rhetoric has hurt the Tesla brand this year.
Musk took to the stage in Austin, Texas, along with dancing robots. "What we are about to embark upon is not merely a new chapter of the future of Tesla, but a whole new book," he said. "This really is going to be quite the story." Shareholders also re-elected three directors on Tesla's board and voted in favour of holding annual elections for all board members and a replacement pay plan for Musk's services because a legal challenge has held up a previous package.
"Other shareholder meetings are like snoozefests, but ours are bangers," Musk said. "I mean, look at this. This is sick."
Shareholders voted in favour of Tesla investing in Musk's artificial intelligence startup, xAI, though there were many abstentions.
Although conflict-of-interest concerns have arisen over Tesla's possible investment in xAI, the move is seen as widely benefiting both companies as the EV maker's self-driving ambitions hinge on critical AI prowess and xAI would gain from a major customer like Tesla.
A win for Musk was widely expected as the billionaire was allowed to exercise the full voting rights of his roughly 15 per cent stake after the automaker moved to Texas from Delaware. Some major investors had opposed the plan, including Norway's sovereign wealth fund and proxy firms Glass Lewis and Institutional Shareholder Services, saying the pay could decrease shareholder value.
Tesla's board had said Musk could quit if the pay package was not approved.
Under the new package, Musk could earn as much as $878 billion in Tesla stock over 10 years. He could be given as much as $1 trillion in stock but will have to make some payments back to Tesla.
The vote allays investor concern that Musk's focus has been diluted with his work in politics as well as in running his other companies, including rocket maker SpaceX and xAI. The board and many investors who lent their endorsement have said the nearly $1 trillion package benefits shareholders in the longer run as Musk must ensure Tesla achieves a series of milestones to get paid.
Goals for Musk over the next decade include the company delivering 20 million vehicles, having 1 million robotaxis in operation, selling 1 million robots and earning as much as $400 billion in core profit. But in order for him to get paid, Tesla's stock value has to rise in tandem, first to $2 trillion from the current $1.5 trillion, and all the way to $8.5 trillion.
