Tesla is once again asking its investors to approve a massive compensation plan for CEO Elon Musk. The package, valued at up to $975 billion, would be tied to a series of aggressive market and operational milestones over the next decade.
The Details of the Proposal
The plan divides into 12 performance tranches that Musk would unlock only if Tesla achieves certain goals. The first milestone requires Tesla’s market capitalization to nearly double to $2 trillion. The final target is $8.5 trillion. Alongside those financial benchmarks, Tesla must also hit operational goals such as delivering 20 million vehicles, reaching 10 million Full Self-Driving subscriptions, and deploying large-scale robotics and robotaxis.
If fully achieved, Musk would gain more than 423 million additional shares, adding significantly to his current 13% ownership stake. Tesla Chairwoman Robyn Denholm defended the plan, saying it is intended to keep Musk “motivated and focused on delivering for the company.”
Context and Controversy
This new plan comes as Tesla struggles with slumping sales, rising competition from Chinese EV makers, and fallout from Musk’s political rhetoric. It also follows the legal defeat of his 2018 $56 billion pay plan, which a Delaware court ruled was improperly approved. Tesla has since moved its corporate incorporation from Delaware to Texas and is appealing the decision.
The package also does not require Musk to dedicate a minimum number of hours to Tesla, leaving him free to divide his time between his many ventures, including SpaceX, Neuralink, The Boring Company, xAI, and his ownership of X. At the same time, Tesla has said shareholders will also vote on whether the company should invest in Musk’s AI venture xAI at the upcoming November 6 meeting.
Tesla’s board argues the new pay package is necessary to keep Musk tied to Tesla’s long-term future. Critics, however, say the deal mirrors many of the same issues as the 2018 package — excessive influence from Musk, limited board independence, and risks for ordinary shareholders.
What The Author Thinks
A nearly trillion-dollar pay plan may sound like an incentive, but in reality it feels like Tesla placing all its chips on Musk. While his vision has undeniably driven Tesla’s growth, tying the company’s entire future to one individual — especially when his focus is spread across multiple businesses — raises big governance concerns. Investors may see short-term motivation, but the long-term risks could outweigh the rewards.
Featured image credit: Prometheus via Unsplash
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