Tesla’s board has unveiled a compensation plan for CEO Elon Musk that could eventually be worth $1 trillion, the largest ever proposed for a corporate executive. The award, tied entirely to performance, would grant Musk additional stock if Tesla achieves a series of demanding milestones over the next decade.
The plan, disclosed in a securities filing Friday, would deliver Musk up to 12% of Tesla’s stock if the company’s market valuation climbs to $8.6 trillion within ten years. That figure is nearly eight times Tesla’s current worth and exceeds the combined valuations of major tech giants such as Alphabet, Microsoft, and Meta. If the goals are met, Musk would also strengthen his voting power from about 13% today to nearly a quarter of the company.
Tesla said the package is designed to keep Musk focused on leading the company through its next phase, which aims to shift emphasis from electric vehicles to robotics and artificial intelligence. Musk has claimed that humanoid robots and autonomous taxis could one day account for most of Tesla’s value, even predicting the company might eventually reach $25 trillion in market capitalization.
The compensation plan does not include a salary or cash bonus. Instead, it mirrors the structure of Musk’s 2018 package, linking rewards strictly to performance targets. That earlier plan, initially valued at $56 billion, remains mired in legal disputes in Delaware, where a judge twice struck it down over governance concerns. Tesla has since reincorporated in Texas and is appealing the ruling.
Supporters of the new package say it ensures Musk remains tied to Tesla’s long-term success. “It rewards Musk for growing Tesla’s market cap and delivering returns to shareholders,” said Seth Goldstein, an analyst with Morningstar. He added that it alleviates near-term worries about Musk walking away from the company.
Critics argue Musk is already sufficiently incentivized as Tesla’s largest shareholder and that the award raises questions about corporate governance. Brian Quinn, a professor at Boston College Law School, called the plan “a ridiculously large pay package,” pointing out that Musk has faced little resistance from Tesla’s board. Others warn the scale of the plan could dilute other investors and tighten Musk’s control over the company.
The proposed award also comes at a time of challenges for Tesla. Demand for electric vehicles has slowed, competition from Chinese automakers such as BYD is rising, and the company has reported falling profits in recent quarters. In Europe, Tesla sales have dropped sharply following controversies over Musk’s political activities, including his clashes with President Donald Trump and the launch of his own political party.
Despite these headwinds, Tesla’s shares rose 3% after the announcement. Analysts noted that investors continue to view Musk as essential to Tesla’s brand and future, even if his outspoken behavior sometimes alienates customers. Dan Ives of Wedbush Securities said in a client note that “the biggest asset for Tesla is Musk,” though he acknowledged that repairing Musk’s personal brand remains “a work in progress.”
The package will be put to a shareholder vote at Tesla’s annual meeting in November. Approval would cement Musk’s status not only as the world’s richest individual, with an estimated net worth of more than $400 billion, but potentially as the first trillionaire if the targets are achieved.
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