Tesla’s board of directors has proposed what could be the largest CEO compensation package in history, a move designed to secure Elon Musk’s long-term focus on the company. The plan, which could make Musk the world’s first trillionaire, is tied to a series of performance metrics that appear ambitious, if not far-fetched.
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To receive the full payout, Musk would need to stay with the company for at least ten years. The primary financial goal is to increase Tesla’s market value to a staggering $8.5 trillion, a significant leap from its current value of about $1.1 trillion. Beyond this, the package includes other key benchmarks, such as deploying a million Tesla robotaxis and a million AI robots. The proposal is seen as an incentive to keep Musk’s attention on Tesla amidst his other ventures, including a rocket company and an AI company.
In a letter to shareholders, Tesla board leaders Robyn Denholm and Kathleen Wilson-Thompson stated, “We believe that Elon’s singular vision is vital to navigating this critical inflection point.” They also acknowledged the formidable nature of the goals, emphasizing the importance of retaining a leader who is “eager to meet this challenge.” The letter implied the package was partly a response to Musk raising “the possibility that he may pursue other interests” if he didn’t receive such assurances.
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The proposed compensation plan will be put to a shareholder vote on November 6. If approved, it would replace a similar, performance-based package from 2018 that was previously struck down by a Delaware judge. If Musk successfully meets all the required benchmarks, his stake in Tesla would grow from 13% to 29%, a massive increase in ownership and influence.
