Over 75% of Shareholders Approve Compensation Package
Musk: "Tesla AI Chips to Be Manufactured by Samsung Electronics and Others"
An agenda item granting Tesla CEO Elon Musk stock compensation worth $1 trillion (approximately 1,400 trillion won) if he achieves management goals such as reaching a market capitalization of $8.5 trillion and delivering 20 million vehicles has passed at the shareholders’ meeting. Despite opposition from institutional investors and corporate watchdog groups, CEO Musk secured the world’s largest compensation package, drawing attention to the management strategies he will employ to achieve these ambitious targets. At the meeting, Musk also revealed that Tesla’s next-generation AI5 chips will be manufactured by Samsung Electronics and TSMC, and hinted at the possibility of building a “Tesla Tera Fab” to expand in-house semiconductor production.
Massive Compensation Package Approved Despite Institutional Investor Opposition... Payment Contingent on Achieving Management Goals
According to the live-streamed shareholders’ meeting video released by Tesla on November 6 (local time), the stock compensation plan for CEO Musk was approved by shareholder vote at the annual meeting held at Tesla’s headquarters in Austin, Texas. More than 75% of all investors voted in favor, and upon the announcement of the result, the meeting hall erupted in cheers of “Elon!” Musk briefly danced on stage with the humanoid robot “Optimus” before saying, “Thank you, everyone.”
It was reported that Musk, who owns about 15% of Tesla shares, also participated in the vote. Until last year, Tesla’s corporate registration was in Delaware, which prevented the CEO from voting on compensation-related matters. However, after Tesla moved its corporate registration to Texas following last year’s shareholders’ meeting, the new regulations allowed the CEO to vote according to his shareholding.
The compensation plan, designed by Tesla’s board of directors, stipulates that if Musk achieves predetermined management goals, he will receive approximately 423 million shares-about 12% of Tesla’s total common stock-in 12 tranches by 2035. Should Musk receive the full stock compensation, its value is estimated to approach $1 trillion, an unprecedented sum in corporate history.
To receive this compensation, Musk must first raise Tesla’s current market capitalization from about $1.5 trillion to $2 trillion, then sequentially achieve additional targets, ultimately reaching a market capitalization of $8.5 trillion. He must also deliver 20 million Tesla vehicles, secure 10 million subscriptions to autonomous driving software, deploy 1 million humanoid robots, achieve commercial operation of 1 million robotaxis, and reach $400 billion in EBITDA.
Previously, Tesla’s board warned shareholders in an open letter last month that if the compensation plan was not approved at the shareholders’ meeting, Musk might leave the company.
On October 22, during a conference call following the third-quarter earnings announcement, Musk referenced the humanoid robot “Optimus” under development at Tesla, stating, “If we build this army of robots, will I have strong influence over that robot army? At the very least, if I don’t have strong influence, I would feel uncomfortable building such an army.” This was interpreted as suggesting he would lack motivation to develop related technologies if he did not have final decision-making authority and leadership over the project. Despite these warnings from Musk and the board, Norway’s sovereign wealth fund, a major Tesla shareholder, announced its intention to vote against the plan.
Tesla AI Chips to Be Produced by Samsung Electronics and Others... Expresses Commitment to Building In-House Semiconductor Plant
At the shareholders’ meeting, Musk expressed his intention to build an in-house semiconductor plant and revealed plans to collaborate with Samsung Electronics. He stated that Tesla’s next-generation “AI5” chip would “basically be produced at four locations,” directly mentioning three production bases at Samsung Electronics and TSMC. He added, “TSMC and Samsung, Tesla’s main partners, and possibly Intel as well, will be involved. However, even under the best-case scenario from suppliers, the projected chip output is still insufficient. Ultimately, we will need to build the Tesla Tera Fab.” This suggests Tesla may expand from outsourcing semiconductor production to in-house manufacturing.
Musk explained, “We have agreed to purchase all chips produced by TSMC and Samsung. Literally, the faster they make chips, the faster we pay them, but even so, the pace is not fast enough.” He continued, “We already have improvement plans for AI6, and expect that within a year after starting AI5 production, we can transition to AI6 in the same facility and double all performance metrics.”
Musk noted that Tesla’s autonomous driving software and humanoid robot development are rapidly advancing thanks to AI technology, stating, “We are dedicating significant time to new Tesla chip designs.” He emphasized, “To build functional robots, we need excellent AI chips that are both affordable and extremely power efficient. We believe the AI5 chip will consume about one-third the power of a chip like Nvidia’s Blackwell.”
He also projected that once Optimus robots reach an annual production rate of 1 million units, the cost per unit will be about $20,000, and announced that production of the Cybercab, a dedicated autonomous vehicle, will begin in April 2026.
On the New York Stock Exchange that day, Tesla closed at $445.91, down 3.54% from the previous session. After the announcement of the shareholders’ meeting result regarding Musk’s compensation, the stock saw a temporary rise of more than 2% in after-hours trading.
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