Tesla has proposed a new pay package for CEO Elon Musk that could make the world’s richest person a trillionaire.
The pay package, which is up for consideration at Tesla’s annual shareholder meeting in November, would grant Musk about 423 million shares in the company if he meets a series of milestones over the next 10 years.
At Tesla’s current share price, this amounts to about $145 billion. However, under the agreement, Musk would need to grow the electric vehicle (EV) maker’s market capitalization to a massive $8.5 trillion, making the pay package worth about $1 trillion.
The company is currently worth nearly $1.1 trillion. The board’s lofty goals far exceed even the most valuable firm in today’s market, Nvidia, which sits at around $4 trillion.
Tesla would also need to deliver 20 million vehicles and 1 million bots, in addition to securing 10 million self-driving subscriptions and putting 1 million robotaxis on the road in order for Musk to secure his trillion-dollar payday.
The Tesla board framed its proposal in the context of the race to develop AI. While Tesla produces EVs, it has increasingly turned its attention to AI and robotics in recent years.
“[The] Special Committee determined that the failure to retain and incentivize Mr. Musk could put Tesla at risk of losing not only its CEO and leader in the AI field, but also the AI talent that would likely be inclined to leave in the absence of his leadership, as Mr. Musk’s leadership is a significant factor in attracting highly skilled talent to Tesla,” the board wrote in a securities filing Friday.
It also underscored that Musk, who also oversees SpaceX, X and Neuralink, “raised the possibility of prioritizing other ventures” if they couldn’t reach an agreement on a new pay package.
The new agreement comes after the board announced plans in August to grant the Tesla CEO $29 billion worth of shares as a “good faith” payment while his 2018 pay package remains tied up in court.
The earlier agreement, much like the latest proposal, required Musk to meet a series of milestones. After clearing these hurdles, the Tesla CEO became eligible for the package, initially worth about $56 billion.
However, a Delaware judge struck down the agreement in January 2024, finding it wasn’t negotiated fairly. She rejected a second attempt by the company to approve the pay package last December.
Tesla’s share price is currently down 8 percent since the beginning of the year, a significant recovery from earlier this year when the company’s stock was down more than 40 percent amid Musk’s tumultuous tenure in the Trump administration.
