Tesla shareholders are voting to approve a $56 billion pay package for Elon Musk and to move the electric vehicle maker's legal home to Texas, Musk said on social media platform X on Wednesday, adding that passage was by wide margins.

Photo/X

As CEO of the world’s largest electric vehicle manufacturer, Musk does not receive a fixed salary; instead, his entire compensation is tied to the company’s market value and performance.

In 2018, Tesla approved a 10-year long-term compensation plan for Musk, which included 12 tranches of market capitalization and operational targets. If Musk met all the targets, he would accumulate 12% of Tesla’s stock options as a reward, valued at approximately $56 billion at the time. This plan was also considered by foreign media to be the largest executive compensation plan in U.S. history. Based on Tesla’s closing price on June 11th, these options are currently valued at approximately $51.2 billion.

At the time, achieving all the targets seemed challenging, as the market capitalization goal was set at $650 billion, while Tesla’s market value was about $59 billion. However, shortly after the announcement of this long-term compensation plan, Tesla’s development entered the “fast lane,” with its market value exceeding $1 trillion in 2021. Tesla also stated that in the six years following the approval of Musk’s 2018 compensation plan, he had created over $735 billion in value for the company’s shareholders.

As of 4 PM Beijing time on June 13th, Tesla’s market value was approximately $565.41 billion.

However, in 2022, some Tesla shareholders took Musk to court, claiming he devoted most of his energy to other companies like SpaceX and used his control over the company and its board to secure the long-term compensation plan, leading shareholders to seek its cancellation.

In January of this year, a Delaware judge declared Musk’s long-term compensation plan invalid on the grounds of being “unfair to shareholders.” In response, Musk expressed his intention to move Tesla’s registration from Delaware to Texas, which, aside from his compensation plan, was another significant matter for Tesla’s shareholders to vote on at the upcoming shareholder meeting.