Tesla put forward a new proposal Friday that could make Elon Musk a trillionaire as the electric vehicle (EV) maker seeks to keep its CEO focused on the firm as the AI race heats up.
The proposal would give the world’s richest person some 423 million shares in the company if Tesla meets a series of milestones in the next 10 years, including growing the firm’s market capitalization to an ambitious $8.5 trillion.
Under these conditions, the pay package would be worth about $1 trillion, boosting Musk from multibillionaire to the world’s first trillionaire.
The proposal, which still requires the approval of Tesla shareholders, comes as some have worried in recent months about Musk’s focus on the company.
The tech mogul, who also owns X, SpaceX, Neuralink and the Boring Company, added politics to his already packed portfolio earlier this year, when he briefly took on a role in the Trump administration leading the Department of Government Efficiency (DOGE).
The move proved particularly costly for Tesla, which saw its share price and earnings tank as the EV maker became a political symbol for Musk and his cost-cutting push at DOGE.
The company continued to feel the effects of Musk’s political endeavors even after he left the White House to focus on his companies again. The Tesla CEO engaged in a very public feud with President Trump, who threatened to target Musk’s government contracts and subsidies.
The Tesla board argued Friday it is “imperative for Tesla’s continued success and transformative growth that Mr. Musk be retained and highly incentivized to focus a significant amount of his time and efforts towards achieving his vision for Tesla.”
Meanwhile, his previous pay package, initially worth about $56 billion, has remained tied up in court since it was struck down by a federal judge in Delaware last year.
This appears to have been a point of contention amid negotiations with the board over his role at the company, as Musk pushed for assurances that “he would be compensated for his past services in accordance” with the 2018 package. He also sought a 25 percent voting stake in Tesla.
“Mr. Musk also raised the possibility that he may pursue other interests that may afford him greater influence if he did not receive such assurances,” the board noted.
The latest pay package would provide Musk with about 12 percent of Tesla shares, bringing his voting power to around 25 percent, as requested.
Wedbush Securities analyst Dan Ives described this as essential to keeping Musk at the helm at a critical time for the firm.
“We believe this was the smart move by the Board as the biggest asset for Tesla is Musk … and with the AI Revolution this is a crucial time for Tesla ahead with autonomous and robotics front and center,” he wrote in a note Friday.
AI, as Ives underscored, also appears to have been key to the board’s push to keep Musk on board. Despite being an EV maker, Tesla has increasingly focused on AI and robotics, in the form of autonomous vehicles and humanoid robots.
As tech firms race to develop AI, this has resulted in a fierce competition to attract top talent, occasionally with multimillion-dollar paychecks.
“Given this backdrop, 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 added.
