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.

Labour’s new deputy leader Lucy Powell has said the Government should not rip up its manifesto promises over tax hikes, amid mounting speculation it is preparing to do so at the Budget.

Ms Powell, who was sacked from Sir Keir Starmer’s Cabinet in September before winning the deputy leadership election last month, said “we should be following through on our manifesto, of course”.

She suggested breaking the pledge not to raise income tax, national insurance or VAT would damage “trust in politics”.

Speaking to BBC Radio 5 Live, the former Commons leader said: “We should be following through on our manifesto, of course. There’s no question about that.”

She continued: “Trust in politics is a key part of that because if we’re to take the country with us then they’ve got to trust us and that’s really important too.”

Ms Powell said the highly anticipated Budget should be about “putting more money back into the pockets of ordinary working people”.

She said: “That’s what that manifesto commitment is all about. And that’s what this Budget will be about I’m sure.”

She added: “It’s really important we stand by the promises that we were elected on and that we do what we said we would do.”

The Manchester Central MP also called for the two-child benefit cap to be lifted “in full” as a matter of urgency.

The Government has come under increasing pressure to scrap the policy, which restricts child tax credit and universal credit to the first two children in most households.

Ms Reeves is expected to make changes to the limit, first announced in 2015 by the Conservatives, in her autumn statement.

It has been reported the Treasury is looking at different options including whether additional benefits might be limited to three or four children, or whether there could be a taper rate meaning parents would receive the most benefits for their first child and less for subsequent children.

Ms Powell said: “I think what we’ve all been talking about recently is the urgency of that now, because every year that passes with this policy in place, another 40,000 minimum, 40,000 children, are pushed into deep levels of poverty as a result of it and that’s why it is urgent that we do lift it and we lift it in full.”

Her comments could cause a headache for the Prime Minister and Chancellor Rachel Reeves, who have recently heightened expectations that the November 26 Budget will feature an increase in the basic rate of income tax.

Doing so would mean ditching Labour’s commitment to voters ahead of last year’s general election not to increase income tax, national insurance or VAT.

Ms Reeves could use a 2p rise in income tax to help plug what the National Institute of Economic and Social Research said is a £50 billion black hole in the nation’s public finances and give herself a larger fiscal headroom.

Ms Powell won the deputy leadership race after a campaign based on a call for the party to change course.

Her intervention will be seen as evidence that she will use her position to speak out against Sir Keir’s administration’s policies, which she is free to do from the back benches, unlike her defeated deputy leadership rival, Education Secretary Bridget Phillipson, who is bound by collective responsibility.