By Justin Pacheco
Tesla’s board has proposed an unprecedented pay package that could see Elon Musk earn more than $1 trillion (£740bn) over the next decade if he meets a series of ambitious performance targets.
Under the proposal, Musk — already the world’s wealthiest individual — would not receive a traditional salary or cash bonus. Instead, he would gradually be awarded Tesla shares, with the total package valued at $1 trillion if he achieves every milestone.
The conditions for unlocking the award are extraordinary. Musk would need to increase Tesla’s market capitalization eightfold, deliver sales of a million artificial intelligence-powered robots, sell an additional 12 million electric vehicles, and hit several other far-reaching operational and financial goals.
Tesla’s board of directors is urging shareholders to back the plan, arguing that retaining Musk’s leadership is essential for the company to achieve what they describe as transformational growth. “Growth that may seem impossible today can be unlocked with new ideas, better technology and greater innovation,” said Tesla chair Robyn Denholm. “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 structure of the award was intended to “drive peak performance from our visionary leader.”
The package comes only weeks after Musk was granted $29bn in shares when his previous $50bn compensation plan was struck down by a US court, which deemed it “unfair to shareholders.”
Under the new scheme, Musk’s potential payout would be divided into 12 tranches, each tied to a pair of milestones: one based on Tesla’s market value and one linked to operational achievements. The first milestone requires Tesla’s market capitalization to double to $2 trillion, while the final target envisions the company reaching a staggering $8.5 trillion — more than twice the current valuation of chip giant Nvidia, the most valuable publicly traded firm in the world. Operational goals include the ambitious sales targets for vehicles and robots, as well as multiplying one of Tesla’s key earnings metrics 24-fold.
The timing of the proposal has raised eyebrows, as Tesla is currently facing its steepest decline in sales in a decade. Analysts attribute part of the slump to Musk’s controversial public image, which they say has damaged the company’s brand.
Dan Coatsworth, an investment analyst at AJ Bell, criticized the board’s proposal as excessive. “Is one person worth that much?” he asked. Coatsworth argued that Musk “presides over a company that has lost its edge, is being overtaken by rivals, and whose brand has been tarnished by Musk’s actions outside of Tesla.” He went on to say, “Surely Musk should be fighting for his job, not Tesla’s board fighting to keep him?”
The debate over Musk’s future at Tesla has been simmering for months. Earlier this year, reports surfaced in the Wall Street Journal claiming Tesla’s board had hired headhunters to explore potential replacements for Musk, citing concerns that he was too preoccupied with his involvement in US politics, particularly his alignment with President Donald Trump, to address Tesla’s falling share price. Tesla strongly denied the report, calling it “absolutely false,” though the Wall Street Journal insisted its reporting was accurate.
Coatsworth noted the inconsistency in the board’s stance, saying: “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.”
