On Thursday, Tesla shareholders approved a compensation plan that could make Elon Musk the world’s first trillionaire, shortly after New Yorkers elected a mayoral candidate advocating higher taxes on the wealthy.
These contrasting events highlight differing perspectives on wealth distribution in America.
In Austin, Texas, Tesla shareholders embraced a winner-take-all capitalism, approving a plan to award Musk shares potentially worth nearly $1 trillion if Tesla meets ambitious targets over the next decade.
Meanwhile, in New York, Zohran Mamdani’s victory underscored widespread discontent with an economic system that many feel fails to support basic needs like food and housing.
This reflects a broader division in U.S. business and politics between billionaires like Musk, who are celebrated for their financial success, and progressives like Mamdani, who advocate for social welfare systems similar to Western Europe’s.
Mamdani’s campaign promised higher taxes on the wealthy to fund universal child care and free public transit, leading to his decisive electoral win.
The new Tesla pay plan, similar to a 2018 initiative, challenges Musk to raise Tesla’s market value to $8.5 trillion from $1.4 trillion and achieve other goals like selling 1 million humanoid robots and securing 10 million self-driving software subscriptions.
“We’re starting not just a new Tesla chapter but an entirely new book,” Musk stated, expressing gratitude for shareholder support.
Some Tesla directors and investors, including Florida’s public pension fund, praised the $1 trillion plan for inspiring Musk to innovate with futuristic technologies.
The Florida State Board of Administration argued that those criticizing the plan’s magnitude overlook Tesla’s ambitious trajectory.
The plan aligns Musk’s financial gains with those of Tesla’s investors, a point emphasized by fund manager Cathie Wood on Musk’s platform X.
However, critics, including New York and California pension fund officials, opposed the plan, citing concerns over wealth and power concentration.
“This is unchecked power, not performance-based pay,” stated New York state comptroller Thomas DiNapoli.
Pope Leo XIV also criticized Musk’s pay as symptomatic of the growing wealth gap, noting the median Tesla worker’s salary was $57,000 in 2024.
Musk suggested Tesla’s humanoid robot, Optimus, could address poverty, though it remains in development.
Musk’s compensation plan was expected to pass, as similar executive stock plans have succeeded at other U.S. companies recently.
Under Texas law, Musk voted his shares, which account for 15% of Tesla stock. If the plan succeeds, his control could rise to 29%, though he may need to sell shares to cover taxes.
Musk likely retained support from smaller investors despite his political involvement and Tesla’s recent challenges.
“Those still invested are firm believers in Musk,” said Randall Peterson of London Business School.
Major investment funds like Vanguard, BlackRock, and State Street Advisors did not disclose their voting intentions, but Norway’s sovereign wealth fund opposed the plan, citing concerns over its size and dependence on Musk.
Opponents argued the plan allows Tesla’s board too much discretion in awarding shares to Musk without meeting product targets.
Tesla’s board defended the plan as crucial for driving growth and innovation.
A Delaware judge previously invalidated a similar 2018 pay package, but Tesla is appealing the decision.
Musk’s approval may fuel Democratic efforts to position him as a political antagonist. “The GOP’s top donor is poised to become a trillionaire with a robot army,” noted Ben Wikler, highlighting concerns over rising wealth concentration.
Shareholders also backed a proposal urging Tesla’s board to consider investing in Musk’s AI company, xAI.
This article was originally published in The New York Times.
