Tesla Proposes $1 Trillion Pay Package for Elon Musk Tied to Ambitious Product Milestones
Key Points
- Tesla proposes a $1 trillion compensation package for Elon Musk.
- Milestones include 20 million total vehicle deliveries.
- Goal of operating one million robotaxis in a three‑month period.
- Target of producing one million Optimus robots overall.
- Aim to secure ten million active Full Self‑Driving subscriptions.
- Requires Tesla to achieve an $8.5 trillion market valuation.
- Board demands a succession plan and limited political involvement.
- Shareholders will vote on the package at a forthcoming meeting.
Tesla’s board has unveiled a compensation plan for CEO Elon Musk's pay that could reach $1 trillion if a series of ambitious targets are met. The plan hinges on delivering 20 million vehicles in total, operating 1 million robotaxis, producing 1 million Optimus robots, and signing up 10 million Full Self‑Driving subscriptions. It also requires the company to achieve an $8.5 trillion market valuation and outlines succession and political‑involvement safeguards. Shareholders will decide on the package at a forthcoming meeting.
Compensation Overview
Tesla’s board of directors has presented a compensation package for Elon Musk that could total $1 trillion over a ten‑year horizon. The proposal, detailed in the company’s proxy statement, is structured around a series of performance milestones that, if achieved, would unlock successive portions of the payout. The board frames the plan as a pathway to making Tesla the most valuable company in history, while also tying Musk’s rewards to concrete product and financial goals.
Product Milestones
The plan sets four primary product‑related targets. First, Tesla must deliver a cumulative total of 20 million vehicles by the end of the compensation period, a reduction from earlier public statements about annual production goals. Second, the company must achieve a daily average of one million robotaxis in commercial operation over a consecutive three‑month span. The definition of “robotaxi” is broad, encompassing any Tesla vehicle using Full Self‑Driving (FSD) software, including customer‑owned cars.
Third, Tesla is tasked with producing one million Optimus robots in total. The board describes these as any AI‑driven mobile robot manufactured on the company’s behalf, distinguishing them from the vehicle lineup. Finally, the plan calls for the activation of ten million active FSD subscriptions, a figure that far exceeds current adoption rates, which executives have described as being in the “teens” of a percentage.
Valuation and Earnings Targets
Beyond product metrics, the compensation scheme requires Tesla to reach an $8.5 trillion market valuation, a level that would place the company well above its current standing. The board also links the payout to annual earnings of roughly $400 billion, a dramatic increase from the most recent earnings reported.
Board Safeguards
To protect shareholder interests, the agreement includes two notable assurances. Musk must collaborate with the board to develop a succession plan, effectively binding him to the company for at least 7.5 years. Additionally, a footnote notes that Musk’s political involvement must wind down in a timely manner, reflecting concerns about external influences on the company’s governance.
Shareholder Decision
The proposed compensation package still requires shareholder approval at an upcoming meeting. Historically, Musk’s compensation plans have received strong support from investors, but the scale and conditional nature of this latest proposal introduce new variables for consideration.