Tesla shareholders have approved a record-breaking pay package for boss Elon Musk that could be worth nearly $1tn (£760bn).

The unprecedented deal was approved by 75% of Tesla shareholders who cast votes at the firm’s annual general meeting on Thursday.

The deal requires Musk, who is already the world’s richest man, to drastically raise the electric car firm’s market value over a period of years. If he meets various targets, he will be rewarded with hundreds of millions of new shares.

The scale of the deal is controversial, but the Tesla board argued that Musk might leave the company if it was not approved – and that it could not afford to lose him.

The announcement drew loud applause from the audience at the meeting in Austin, Texas. Musk took to the stage and danced to chants of his name.

“What we’re about to embark upon is not merely a new chapter of the future of Tesla, but a whole new book,” he said.

“Other shareholder meetings are snoozefests but ours are bangers. Look at this. This is sick,” Musk said.

The milestones Musk achieve include raising Tesla’s market value to $8.5tn from $1.4tn at time of writing.

He would also need to get a million self-driving “Robotaxi” vehicles into commercial operation.

But his early remarks on Thursday placed the spotlight on the Optimus robot, dashing the hopes of some long-time analysts and Tesla watchers who want Musk to focus on reviving the company’s electric vehicle business.

“Let it sink in where Musk’s head is at,” wrote analyst Gene Munster, the managing partner at Deepwater Asset Management, on X.

“His vision of the ‘new book’ starts with Optimus. No mention of cars, FDS and robotaxi yet.”

Later in his remarks, Musk did refer to FSD, shorthand for full-self driving, saying the company was “almost comfortable” allowing drivers to “text and drive essentially.”

He also likened dealing with regulators to being in a Franz Kafka novel.

US regulators are investigating Tesla’s self-driving feature after multiple incidents in which the cars drove through red lights or on the wrong side of the road.

Some of these incidents have resulted in crashes that have caused injuries.

Tesla shares were slightly higher in after hours trading but have risen more than 62% over the last six months.

Wedbush Securities’ Dan Ives, a tech analyst whose been a long time advocate of Musk’s leadership of Tesla, called Musk “Tesla’s biggest asset” in a note published after the vote.

“We continue to believe that the AI valuation is getting unlocked, and we believe the march to an AI driven valuation for TSLA over the next 6-9 months has now begun,” Mr Ives added.

Musk already held 13% of Tesla shares. Shareholders had twice ratified a pay package worth tens of billions of dollars if he achieved a tenfold increase in the company’s market value – which he did.

But a Delaware judge rejected that pay deal on grounds that Tesla board members were too close to Musk.

Tesla reincorporated from Delaware to Texas, and the Delaware Supreme Court is currently reviewing the lower court judge’s decision.