By Flickr user jurvetson Tim Draper/Steve Jurvetson
Tesla’s board of directors has proposed an unprecedented compensation deal for chief executive Elon Musk, potentially worth more than $1 trillion (£740bn), if he can deliver on a sweeping set of highly ambitious targets over the next decade.
The scheme would not provide Musk, already the world’s richest person, with any salary or bonuses. Instead, he would receive a massive share award, distributed gradually in tranches, provided Tesla achieves a series of extraordinary milestones. If all are met, the stock would be valued at more than $1 trillion.
To unlock the payout, Musk must lead Tesla in multiplying its market value by eight, deliver 12 million additional Tesla vehicles, and sell a million humanoid artificial intelligence robots, alongside a range of other operational breakthroughs. Each tranche of shares would be tied to both a market capitalization milestone and an operational target.
The first step requires Tesla’s value to double to $2 trillion. At the top end, the company would need to reach a staggering $8.5 trillion, more than double the current valuation of Nvidia, now the world’s most valuable company. Musk would also be expected to boost one of Tesla’s earnings metrics by 24 times, according to the proposal.
Tesla chair Robyn Denholm urged shareholders to back the package, saying, “Growth that may seem impossible today can be unlocked with new ideas, better technology, and greater innovation. Simply put, retaining and incentivising Elon is fundamental to Tesla achieving these goals and becoming the most valuable company in history.” She added that the award structure was designed to “drive peak performance from our visionary leader.”
The move comes just weeks after Musk received $29 billion in stock, following the cancellation of his previous $50 billion award. That package was struck down by a US court earlier this year for being “unfair to shareholders.”
However, the proposal has drawn sharp criticism. Dan Coatsworth, investment analyst at AJ Bell, said the idea “beggars belief,” questioning whether any individual could be worth such a vast amount.
“Is one person worth that much?” he asked, adding that Musk “presides over a company that has lost its edge, is being overtaken by rivals, and whose brand has been damaged by his behaviour outside Tesla.” He argued that, given the company’s sliding sales — now falling at their fastest pace in a decade — Musk should be “fighting for his job, not Tesla’s board fighting to keep him.”
The board’s decision comes against a backdrop of unease about Musk’s leadership. Only months ago, it was forced to deny reports suggesting it had explored replacing him. According to the Wall Street Journal in May, Tesla had approached headhunters to seek alternatives, citing concerns Musk was more focused on his work with US President Donald Trump than stabilising Tesla’s share price. Tesla dismissed the report as “absolutely false,” though the Journal stood by its story.
Mr Coatsworth remarked, “One minute Tesla’s board is wondering if Elon Musk is a liability to the company given his outspoken views and political distractions, the next they’re effectively saying ‘pick a number, any number’ to lock him in for as long as possible.”
