In a move described as unprecedented in corporate history, Tesla’s board has proposed a sweeping compensation plan for CEO Elon Musk valued at up to $1 trillion, contingent on ambitious performance milestones. The proposal, detailed in a regulatory filing ahead of the company’s shareholder meeting in November, outlines a decade-long stock-based award that could dramatically reshape both Tesla’s trajectory and Musk’s fortunes.
Key Highlights of the Proposal
Size and Structure
- The plan could award Musk up to 12 percent of Tesla’s outstanding stock, with a potential value exceeding $1.03 trillion, if Tesla’s valuation reaches approximately $8.5–8.6 trillion—nearly eight times its current value.
- It builds upon an existing interim award valued at around $29 billion in restricted stock, intended to retain Musk through 2030.
Milestones and Conditions
- Musk must achieve a series of staggering operational and financial targets over the next 10 years, including:
- Delivering 20 million vehicles annually;
- Deploying 1 million robotaxis in commercial operation;
- Producing 1 million humanoid robots;
- Reaching up to $400 billion in adjusted EBITDA.
- The full award vests only if Tesla’s market cap climbs from roughly $1 trillion to about $8.5 trillion.
- Musk must remain with Tesla for at least 7.5 years to access any shares, and up to 10 years for the full payout. Shares are priced at Tesla’s 2025 share price at grant, and full vesting includes holding periods to mitigate rapid selling.
Implications and Governance Concerns
Governance and Voting Power
- If Musk earns the full award, his voting stake could climb to around 25–29 percent, significantly increasing his control over Tesla amid concerns of diminished checks and balances.
Legal and Regulatory Context
- The deal comes amid Tesla’s ongoing appeal of a 2024 Delaware court ruling that voided Musk’s 2018 $55 billion compensation package due to governance and conflict-of-interest issues.
- Tesla has reincorporated in Texas to insulate the company from similar legal scrutiny.
Investor Sentiment
- Proponents argue this mega-package aligns Musk’s incentives with Tesla’s long-term mission—particularly its pivot toward AI, robotics, and autonomy. Analysts like Dan Ives have labeled it a “critical next step” for the company’s future.
- Critics counter that Musk already has substantial personal motivations tied to Tesla’s equity. They warn that the plan could worsen shareholder dilution, centralize power, and sideline governance reforms.
What’s Next?
- The shareholder vote is scheduled for November 6, where Musk, along with his brother, holds significant sway. Approval requires majority support—including the backing of Musk‐aligned shares.
- As questions over Musk’s political engagement and focus continue to grow, the package raises the stakes for Tesla’s future direction. Long-term investors are weighing whether this lavish incentive plan is the right lever to hold on to Musk—and his vision.
This proposed compensation package not only shatters historical records but also marks a dramatic wager on the vision of one of the world’s most polarizing CEOs. As the deadline approaches, all eyes will be on Tesla’s shareholders to see if they’re ready to entrust Musk with the keys—and if he’s ready to deliver.
