Tesla board proposed a 10-year compensation plan for Elon Musk, potentially worth up to $1 trillion
Package grants ~423M shares across 12 tranches, vesting only if Tesla hits massive valuation and operational milestones
Targets include market cap of $8.5T, large earnings expansion, millions of vehicle sales, robotaxi rollout, and AI robot adoption
Plan goes to shareholder vote on Nov 6 in Austin; follows 2018 pay deal being struck down by Delaware court
Tesla’s board has proposed a 10-year compensation plan for CEO Elon Musk that could be worth as much as $1 trillion if a series of extraordinarily ambitious performance milestones are met, the company said in a filing and press coverage.
The package would pay out in large stock tranches only if valuation, profit and product-deployment thresholds are cleared, a design meant to lock Musk into a long-term strategy as Tesla shifts from cars toward autonomous services and AI-driven robotics.
The Proposal
Under the proposal, Musk would receive up to roughly 423 million additional Tesla shares across 12 escalating tranches.
Each tranche requires Tesla to hit a market capitalisation level (the top target is about $8.5 trillion, up from roughly $1.09 trillion today) and to satisfy at least one paired operational target such as dramatic earnings growth, millions of additional vehicle sales, widespread subscription adoption for autonomous driving, deployment of robotaxis or sales of AI robots.
Shares would vest only after targets are sustained for set periods and would be subject to long holding restrictions.
Tesla plans to put the package to a shareholder vote at its annual meeting on November 6 in Austin, Texas. The proposal follows earlier legal drama: a landmark 2018 pay deal for Musk was invalidated by a Delaware judge after a lengthy court battle, and Tesla recently granted an interim equity award, worth roughly $29 billion by the company’s account, while appeals continue.
Approval of the new plan could materially increase Musk’s voting power depending on outcomes of the pending cases and dilution mechanics.
Expected Reaction
Analysts and investors are expected to scrutinise both the scale of the potential payout, which would eclipse any historic CEO award, and the plausibility of the targets.
Coverage from major outlets noted that achieving the top-end payouts would require Tesla to expand revenue and earnings by multiples that far exceed current performance and to build entirely new businesses (robotaxis, mass-market AI robots) at enormous scale. The proposal has already drawn intense market and media attention.
Board’s Argument
Tesla’s board framed the package as essential to retain Musk and to align his incentives with the company’s stated ambition to “democratise” autonomous goods and services.
The structure ties rewards to measurable commercial outcomes rather than cash salary and includes restrictions on immediate sale of awarded shares. But governance experts warn the sheer size and ambitious assumptions underpinning the plan will fuel debate at the shareholder meeting and among regulators and courts.
Next steps include the November shareholder vote, ongoing litigation over prior awards and close market scrutiny of Tesla’s operational roadmap. Even if approved, the package’s real cost will hinge on whether Tesla can deliver the growth and product rollouts the plan requires, a tall order that will be watched closely by investors, proxy advisers and regulators.
