At Tesla’s annual general meeting next Wednesday, the electric vehicle giant’s board will ask shareholders to reinstate a record-shattering compensation deal worth $46 billion for CEO Elon Musk.

The deal, based on a contested 2018 agreement, would be the largest compensation plan in U.S. corporate history. Musk’s haul would be 300 times as much as the $162 million America’s best-paid CEO earned last year.

Musk’s original compensation package, an extraordinary all-or-nothing deal, gave him the right to buy up to 304 million Tesla shares at a preset price of $23.34—provided he met a series of 12 Herculean financial milestones. Tesla was then valued at about $50 billion. To claim his full payout, Musk committed to boosting the company’s value to more than $650 billion—a proposition that seemed “laughably impossible” at the time. More than 70% of shareholders approved the plan.

Over the next four years, Musk sped past those milestones. In 2021, Tesla’s share price soared above $400, lifting the company’s value to more than $1 trillion. The stock has since tumbled to $177, paring market capitalization to $560 billion. That still leaves Tesla the most valuable car company in the world—and the shares pledged to Musk valued at $46 billion.

In January of this year, a Delaware judge voided Musk’s 2018 compensation deal, contending that the process to decide it was “deeply flawed.” She deemed the payout an “unfathomable sum” that was unfair to shareholders. 

So in April, Tesla’s board of directors said it would ask shareholders to vote again to ratify the package. Board chair Robyn Denholm argues the vote is a matter of basic “fairness to our CEO.”

Billionaire investor Ron Baron declares Musk “the ultimate ‘key man’ of key man risk.” Barron’s bets that next week’s shareholder vote “will likely be yes.”

But not everyone is on board. Leo Koguan, one of Tesla’s largest individual shareholders, says he’ll vote against the package on the grounds that Musk has “abandoned” Tesla in favor of other businesses. Proxy advisors ISS and Glass Lewis recommend investors reject the deal. California Public Employees Retirement System, America’s biggest pension fund, will vote against the proposal.

The battle is also about control. Denholm hints that if shareholders don’t approve Musk’s payout, he’ll walk. Musk says he wants to increase his current 13% stake in Tesla to at least 25%. Adam Jonas, Morgan Stanley autos analyst, warns Musk may decide to shift focus of his AI efforts to non-Tesla entities over which he has firmer control.

That doesn’t faze Ark Invest CEO Cathie Wood, a long-time Tesla bull who sees the company as the world’s best opportunity for investors to profit from AI. In a video appearance at the Greenwich Economic Forum in Hong Kong Thursday, Wood reaffirmed Ark research suggesting Tesla’s stock price could top $2,000 per share by 2027.

But that forecast assumes 100% growth every year for the next three years. Tesla’s recent performance is nowhere close. The company delivered a record 1.81 million vehicles in 2023. But first quarter results were disappointing. In the U.S., increased competition and weak demand for electric vehicles pushed down sales and profits. In China, Tesla sales slid 6.6% in May from the same month last year even as local rival BYD’s sales surged 38%.

Investors cheered a recent announcement that Tesla plans to update its vehicle lineup with “more affordable” new models in the coming year. Musk has teased a major robo-taxi reveal on Aug. 8. But it remains unclear how either of those efforts will contribute to Tesla’s bottom line.

Still, not a great look for Tesla’s $46 billion man.

More news below.  

Clay Chandler
clay.chandler@fortune.com
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