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The package is often described as a trillion-dollar payday, but that shorthand is misleading. It is not a guaranteed $1 trillion salary or cash payment. It is a performance-based restricted-stock award that could become worth roughly $1 trillion only if Tesla reaches enormous market-capitalization and operating milestones and Musk remains eligible to receive the shares.
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The short answer: Tesla shareholders approved the award
Tesla’s Proposal 4, the management proposal approving the 2025 CEO Performance Award, passed at the company’s 2025 annual meeting on November 6, 2025. The company’s inspector of election certified the result, which Tesla reported in a Form 8-K filed on November 7, 2025. The official Tesla filing states that the proposal was approved.
| Vote category | Votes |
|---|---|
| For | 1,892,235,822 |
| Against | 564,940,908 |
| Abstained | 12,227,846 |
| Broker non-votes | 302,456,274 |
The same meeting also approved Tesla’s amended and restated 2019 Equity Incentive Plan. Shareholders separately approved a non-binding advisory vote on executive compensation.
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Date correction: Any headline saying Tesla would vote on Musk’s package “today” referred to November 6, 2025—not August 11, 2026. There is no pending shareholder vote on this award as of the current research date.
What shareholders approved
Tesla granted Musk approximately 423.7 million performance-based restricted shares on September 3, 2025, subject to the required approvals. The award is divided into 12 equal tranches of 35,311,992 shares, and Tesla’s proxy materials gave it a preliminary aggregate fair-value estimate of approximately $87.75 billion.
The grant represented about 12% of Tesla’s adjusted share count. That does not mean Musk immediately received unrestricted ownership of 12% of the company. The shares remain subject to performance conditions, vesting rules, service requirements, forfeiture provisions and other restrictions. The eventual economic effect depends on how many tranches are earned and the value of Tesla shares when the relevant restrictions are satisfied.
Why the award is called a trillion-dollar package
The trillion-dollar figure describes a possible future value, not the award’s initial accounting value and not a guaranteed payment. If Tesla reaches the plan’s highest market-capitalization and operating targets, and its share price rises accordingly, the shares could be worth roughly $1 trillion.
That distinction matters:
- It is equity, not salary: Musk is not receiving a $1 trillion cash check.
- It is contingent: The shares are earned tranche by tranche only when the required conditions are met.
- It can be forfeited: Unearned shares can be lost if Tesla misses the performance requirements or Musk fails to satisfy the service conditions.
- The headline value is not guaranteed: A future share value depends on Tesla’s market capitalization, operating results and the number of shares ultimately earned.
What Musk and Tesla must accomplish
Each tranche generally requires two types of achievement: Tesla must reach the applicable market-capitalization milestone, and the company must achieve one of the specified operational milestones associated with that tranche. Reaching only one side of the test is not enough.
Market-capitalization targets
The market-capitalization schedule begins at $2 trillion. The targets rise in $500 billion increments through $6.5 trillion, with the final tranche tied to an $8.5 trillion market-capitalization target. The award’s complete terms and tranche conditions are set out in Tesla’s filed award agreement.
These are company-value thresholds, not a promise that Tesla stock will reach a particular price on a particular day. The practical result is that the award links Musk’s potential compensation to a very large increase in Tesla’s market value over the life of the plan.
Operational milestones
The performance tests also include product-adoption, deployment and profitability goals. Tesla filings identify milestones including:
- 20 million cumulative Tesla vehicles delivered;
- 10 million active Full Self-Driving subscriptions;
- 1 million bots delivered;
- 1 million robotaxis in commercial operation; and
- Adjusted EBITDA milestones ranging from $50 billion to $400 billion.
The terms do not require every one of those achievements for the award to have any value. The relevant question is whether Tesla reaches the operational milestone assigned to a particular tranche together with that tranche’s market-capitalization target.
That structure is designed to prevent a rise in the stock price alone from unlocking all of the shares. Conversely, an operational achievement without the required market capitalization would not, by itself, earn the corresponding tranche.
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Service and vesting requirements
Performance success is not the only requirement. The award also contains continued-service conditions. Under the general timing rules, shares earned before the fifth anniversary generally vest on the 7.5-year anniversary, while shares earned later generally vest on the 10-year anniversary, provided Musk remains in eligible service.
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Succession and voting restrictions
The final two tranches contain an additional condition connected to Tesla’s CEO-succession framework.
The agreement also limits the voting power of unearned shares. Until those shares are earned, they vote proportionately with the votes of Tesla’s other shares rather than giving Musk unrestricted voting power over the full potential award. That prevents the entire 423.7 million-share grant from functioning as ordinary voting stock before the performance conditions are satisfied.
Why the shareholder vote was controversial
Tesla’s board presented the award as a long-term retention and incentive mechanism. The board said the package was intended to keep Musk focused on Tesla’s development of artificial intelligence, autonomous driving, robotaxis, robotics and related products. The company’s annual report describes the award as part of that broader effort to align Musk’s incentives with Tesla’s long-term strategy and performance. Tesla’s 2025 Form 10-K provides the company’s explanation.
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The opposing argument focused on the size and complexity of the package. Critics questioned whether performance targets extending across roughly a decade could be evaluated fairly, whether the award was necessary given Musk’s existing influence and ownership, and whether the potential dilution and compensation expense were justified.
Before the vote, Institutional Shareholder Services and Glass Lewis recommended that shareholders vote against the package. Norway’s sovereign wealth fund also opposed it. Those objections did not prevent approval. Reporting on the proxy-adviser recommendations is available from Investing.com.
The 2025 award is not the same as Musk’s 2018 compensation package
One of the easiest ways to misunderstand the current situation is to combine three separate matters:
- Tesla’s newly approved 2025 CEO Performance Award;
- The earlier 2025 interim award; and
- Musk’s separately litigated 2018 compensation package.
What happened to the 2018 package
On December 19, 2025, the Delaware Supreme Court reinstated Musk’s 2018 Tesla compensation award, reversing the earlier rescission ruling. The Delaware Court of Chancery entered a final order implementing that reversal on March 18, 2026. The Supreme Court’s decision is available through the Delaware courts.
Because the 2018 package became exercisable, Tesla’s board determined on April 21, 2026, that Musk’s 2025 interim award had to be forfeited under the arrangement’s no-double-dip provision. That interim award consisted of approximately 96 million restricted shares granted in August 2025.
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How Tesla implemented the reinstated 2018 award
Tesla subsequently entered into an implementation agreement concerning the 2018 award. The agreement imposed service-based vesting conditions on shares to be issued upon exercise and required Musk to continue providing eligible service through January 19, 2028.
It also started the five-year holding period at vesting rather than at exercise. Tesla said this structure was intended to reduce possible market disruption from share sales and did not give Musk additional economic benefit beyond the reinstated 2018 award. Tesla described these developments in its Form 10-Q for the quarter ended March 31, 2026.
That implementation is separate from the 2025 CEO Performance Award approved by shareholders. The 2025 package was not simply a replacement for the 2018 package, and the forfeited 96 million-share interim award should not be added to the 423.7 million shares in the approved long-term award.
What Tesla’s accounting already shows—and what it does not show
Tesla reported that, as of December 31, 2025, it had recorded $162 million of stock-based compensation expense related to the 2025 CEO Performance Award.
The company also estimated:
- $10.23 billion of unrecognized compensation expense associated with one operational milestone it considered probable; and
- $105.82 billion to $120.37 billion associated with milestones it considered not probable at that time.
Those figures are accounting estimates. They are not cash payments to Musk, proof that Musk has earned the shares, or a forecast that Tesla will achieve the milestones. The estimates can change as Tesla’s assessment of the performance conditions, share price and other accounting inputs changes.
Stock-based compensation expense can also affect reported earnings without representing an immediate cash outflow. For readers assessing Tesla’s financial statements, the important distinction is between an accounting estimate, shares that have been earned, shares that have vested and shares that Musk could ultimately sell.
What happens next
Because shareholders already approved the award, the next important developments are operational and documentary rather than procedural. Readers should watch for:
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- Milestone certification: Tesla must determine whether the applicable market-capitalization and operational conditions for individual tranches have been satisfied.
- Service status: Musk must continue to meet the award’s eligible-service requirements, including the relevant long-term vesting conditions.
- Accounting updates: Tesla’s quarterly and annual filings will show how the company updates its probability assessments and stock-based compensation expense.
- Share-count and dilution disclosures: Investors will need to distinguish shares merely reserved or potentially issuable from shares actually earned, vested or issued.
- Operating execution: Vehicle deliveries, FSD adoption, robotaxi activity, bot production and adjusted EBITDA will be central to the award’s performance tests.
- Succession-related disclosures: The final two tranches have an additional CEO-succession-framework condition.
The most reliable way to follow those developments is through Tesla’s investor-relations releases and filings with the Securities and Exchange Commission, rather than headlines that treat the entire potential award as an immediate payment.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Three realistic ways the award could play out
1. Limited or no vesting
Tesla could fail to reach enough paired market-capitalization and operational milestones. Alternatively, Musk could fail to satisfy the applicable service requirements. In that case, most or all unearned shares would be forfeited.
2. Partial vesting
Tesla could reach some of the product, adoption or profitability goals while also reaching the matching market-capitalization targets. Musk would then receive only the tranches whose conditions were satisfied and whose later vesting requirements were met.
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3. Broad vesting
Tesla could achieve a combination of extremely high market capitalization, mass vehicle deliveries, widespread FSD adoption, commercial robotaxi deployment, large-scale bot production and extraordinary adjusted EBITDA. The award could then become exceptionally valuable—but that value would be tied to a Tesla that had also grown dramatically in market value and operating performance.
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These are scenario descriptions based on the award terms, not predictions about Tesla’s stock price, product plans or future financial results.
How to read the headline without overstating the deal
The most accurate description is that Tesla approved a potentially enormous, performance-contingent equity award for Musk. Calling it a trillion-dollar paycheck suggests that Musk has already received, or is certain to receive, that amount in cash. He has not.
A more precise summary is:
Tesla shareholders approved a 423.7 million-share performance award for Elon Musk. The award could be worth roughly $1 trillion if Tesla reaches its highest market-capitalization and operating milestones, but the shares remain subject to performance, service, vesting, succession and forfeiture conditions.
Primary documents and further reading
- Tesla Form 8-K: 2025 annual-meeting results and certified vote
- Tesla 2025 CEO Performance Award agreement
- Tesla 2025 Form 10-K
- Tesla Form 10-Q for the quarter ended March 31, 2026
- Delaware Supreme Court decision concerning the 2018 compensation award
Frequently Asked Questions
Did Tesla shareholders vote on Musk’s pay package on August 11, 2026?
No. The relevant shareholder vote took place on November 6, 2025, and Tesla filed the certified results on November 7, 2025. As of August 11, 2026, the vote is complete.
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No. The award consists of performance-based restricted shares, not a guaranteed cash payment. Musk must satisfy the market-capitalization, operational-performance and service conditions for the applicable tranches, and the shares can be forfeited if those conditions are not met.
What are the main targets in Tesla’s 2025 CEO Performance Award?
The award uses market-capitalization milestones beginning at $2 trillion and reaching $8.5 trillion for the final tranche, paired with operational milestones involving vehicle deliveries, active FSD subscriptions, bots, commercial robotaxis and adjusted EBITDA.
Is the 2025 award the same as Musk’s 2018 Tesla compensation package?
No. The 2025 CEO Performance Award is separate from the 2018 package that was reinstated by the Delaware Supreme Court in December 2025. Tesla also forfeited a separate 96 million-share interim award in April 2026 under a no-double-dip provision.
The Bottom Line
Bottom line: Tesla shareholders already approved Musk’s 2025 CEO Performance Award. The package is not a guaranteed trillion-dollar paycheck: it is a long-term equity award that depends on Tesla reaching extraordinary market-capitalization and operating milestones, Musk remaining in eligible service and the relevant shares later vesting. The next story is milestone certification, financial-statement treatment and execution—not another shareholder vote.
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