If approved, the compensation plan could give Musk control of more than 25 percent of the company’s stock.
Tesla shareholders are set to vote Thursday on a proposed pay package for Elon Musk that could potentially make him the world’s first trillionaire.
The 2025 CEO Performance Award, as outlined by Tesla’s board of directors, would grant Musk up to 423.7 million shares of Tesla stock over the next decade.
However, that package is contingent on the company achieving an ambitious series of operational and financial targets.
The full value of the potential stock grant is estimated at nearly $1 trillion. That eye-popping amount assumes Tesla reaches a market capitalization of $8.5 trillion within the next 10 years, and Musk will not receive the full package without hitting that milestone. However, the compensation package is structured so that Musk will receive substantial awards provided that the company meets certain market capitalization milestones between 2025 and 2035.
In September, members of the board warned Tesla shareholders that Musk has “raised the possibility that he may pursue other interests” if the pay package is not approved.
In a letter distributed to shareholders in September, Robyn Denholm, chair of the Tesla board, and board member Kathleen Wilson-Thompson warned that failing to pass the plan could result in the loss of Musk’s “time, talent and vision.” The directors said Musk’s leadership is critical to Tesla’s success as it seeks to expand into artificial intelligence and autonomous technology.
Targets and Conditions
The package is structured in 12 tranches, each worth 35.3 million shares, tied to both market capitalization milestones and operational objectives. The first market cap target is $2 trillion, and the final milestone is $8.5 trillion. Operational targets include:
- Delivering 20 million vehicles over 10 years, more than double Tesla’s production over the past dozen years.
- Securing 10 million full self-driving subscriptions.
- Producing 1 million humanoid robots through Tesla’s Optimus division.
- Operating 1 million robotaxis in commercial service.
- Meeting earnings milestones in eight consecutive quarters, each measured over four quarters.
While these goals are technically achievable, Tesla has struggled to meet some recent operational benchmarks.
In its most recent quarter, the company delivered just under 498,000 vehicles and reported $4.2 billion in adjusted earnings before interest, taxes, depreciation, and amortization. This performance is far below the thresholds required to unlock the largest portions of Musk’s award.
