Tesla Proposes $1 Trillion Pay Package for Elon Musk Tied to Ambitious Milestones

Tesla’s board has unveiled a record-breaking compensation plan for CEO Elon Musk, worth up to $1 trillion over the next decade. To unlock the payout, however, the world’s richest man must achieve a set of goals widely seen as nearly “impossible.”

Compensation Linked to Market Value and Long-Term Growth

Under the proposal announced on September 5, Musk will not receive a traditional salary or cash bonus. Instead, he would be awarded 423 million Tesla shares in stages, unlocked only if the company meets strict benchmarks tied to market capitalization, profitability, and sales of electric vehicles, robotaxis, and AI-powered robots.

“We must keep Elon at Tesla and align his incentives with extraordinary long-term shareholder value,” Chairwoman Robyn Denholm said in a letter to investors.

The ultimate target: raising Tesla’s market value from its current $1.09 trillion to $8.5 trillion — more than double Nvidia’s present valuation of $4.2 trillion.

Nearly Unrealistic Targets

To fully realize the package, Tesla must:

Sell an additional 12 million electric vehicles.

Enroll 10 million customers in its self-driving subscription service.

Deploy 1 million robotaxis worldwide.

Sell 1 million AI-powered humanoid robots.

Boost adjusted earnings to $400 billion — 24 times current levels.

Reality, however, paints a different picture: Tesla’s adjusted profit last year stood at $16.6 billion, total vehicle sales have reached 8 million, and the company has yet to commercialize robotaxis or robots.

Echoes of the 2018 Compensation Plan

The proposal mirrors Musk’s 2018 pay package, which allowed him to push Tesla’s valuation from $59 billion to over $650 billion, securing $56 billion in stock options — the largest payout in corporate history.

But last year, a Delaware court struck down that plan, ruling it excessive and influenced by a board too close to Musk. Tesla has since appealed and moved its corporate registration from Delaware to Texas.

Controversy and Risks

A potential $1 trillion payout is already stirring debate over fairness, especially as Tesla grapples with headwinds: shares have lost more than 30% since late last year, sales are slowing, and Musk faces personal controversies alongside political tensions.

Still, Musk insists he must control at least 20% of Tesla to shield it from activist investors or hostile takeovers, citing the company’s strategic work in AI and robotics.

Shareholders to Decide in November

The proposal will be put to a vote at Tesla’s annual meeting in Austin, Texas, on November 6. If approved, the company will issue 423 million new shares, potentially lifting Musk’s stake to 32%. After taxes and dilution, his effective voting power would be closer to 25%.

Shareholders will also weigh several other proposals, including a nonbinding resolution urging Tesla to invest in xAI, Musk’s artificial intelligence startup, which has already received $2 billion in funding from SpaceX.