Tesla Board Proposes Record‑Breaking Compensation Plan for Elon Musk
Key Points
- Tesla board unveils a compensation plan that could make Elon Musk the first trillion‑dollar CEO.
- Full payout requires raising Tesla’s market value to $8.5 trillion and deploying one million robotaxis and AI robots.
- Musk must stay with Tesla for at least 7.5 years to receive any shares, with full vesting after 10 years.
- Potential increase in Musk’s ownership stake from 13 percent to 29 percent if milestones are met.
- Board cites Musk’s vision as essential and frames the plan as a safeguard against his possible departure.
- Shareholders will vote on the proposal; approval is needed for implementation.
Tesla's board has unveiled a compensation proposal that would make Elon Musk the first trillion‑dollar CEO if a 10‑year plan meets aggressive performance targets. The plan ties Musk’s payout to milestones such as lifting Tesla’s market value to $8.5 trillion, deploying one million robotaxis, and launching one million AI robots. It also requires Musk to remain with the company for at least seven and a half years to claim any shares, with full vesting after a decade. Shareholders will vote on the package, which the board says is essential to keep Musk focused on Tesla’s long‑term growth.
Board’s Vision for an Unprecedented Pay Package
In a shareholder letter, Tesla’s board presented what they describe as the largest CEO compensation plan in corporate history. The proposal is structured to align Elon Musk’s personal wealth with Tesla’s future market dominance, aiming to keep his attention on the automaker amid his other ventures.
Performance Milestones and Vesting Requirements
The plan sets a series of ambitious targets. To earn the full payout, Musk must increase Tesla’s market capitalization from its current level to $8.5 trillion. Additional benchmarks include the deployment of one million Tesla robotaxis and the production of one million AI robots. The compensation is also contingent on Musk stays with Tesla for at least seven and a half years to receive any shares, with full vesting after ten years.
Potential Financial Impact
If Musk meets all the stipulated goals, his ownership stake could rise dramatically, potentially swelling from the current 13 percent to 29 percent. The total value of the payout, based on the plan’s calculations, would approximate $900 billion, a figure that would elevate Musk to the world’s first trillion‑dollar CEO.
Board Rationale and Shareholder Vote
Board members Robyn Denholm and Kathleen Wilson‑Thompson emphasized Musk’s singular vision as crucial to navigating what they label an “inflection point” for the company. They also indicated that the proposal responds to Musk’s expressed willingness to pursue other interests if his compensation were not secured. The plan now heads to a shareholder vote, with approval required for it to take effect.
Context and Controversy
This proposal follows a Delaware judge’s earlier decision to strike down a similar performance‑based package from 2018, which Tesla subsequently appealed. The new plan, if approved, would replace the older arrangement. The board has also highlighted structural safeguards designed to minimize stock‑price volatility, acknowledging the volatility Tesla’s shares have experienced in recent years.