- Tesla's board proposed a $1 trillion pay package for CEO Elon Musk based on future goals
- Musk could receive up to 423.7 million Tesla shares over the next decade
- Full package requires Tesla to reach $8.5 trillion market value, eight times today's value
Tesla's board of directors has proposed a new pay package to the tune of $1 trillion for CEO Elon Musk, subject to the company hitting its ambitious future goals. The plan would give the billionaire up to 423.7 million Tesla shares over the next decade.
At Friday's closing price, the shares were worth about $148.7 billion. But Musk becomes eligible to get the full package only if Tesla reaches a market value of $8.5 trillion, eight times today's value and double the record of any company, Reuters reported.
The board said "Musk singularly possesses the leadership characteristics necessary to transform Tesla and realise its long-term mission at an unparalleled level," as per CNN. The filing also said Musk might pursue other interests without assurances from the board.
Tesla raised concerns over Musk splitting his time between SpaceX, Starlink, xAI (which owns X), and political engagements. Earlier this year, the board reportedly considered finding a successor, though both Musk and chair Robyn Denholm denied it. Musk then announced he would focus on Tesla full-time.
Ross Gerber, CEO of Gerber Kawasaki and an early Tesla investor, said the pay package was "all about Musk being scared about being kicked out of Tesla because he only owns 13 per cent."
Elon Musk has made it clear that he wants at least 25 per cent voting control of Tesla.
In January 2024, he wrote on X, "I am uncomfortable growing Tesla to be a leader in AI & robotics without having about 25% voting control. Enough to be influential, but not so much that I can't be overturned... Unless that is the case, I would prefer to build products outside of Tesla."
The pay package effectively ensures he retains the influence he wants, which also reassures the board that he won't leave.
Critics admit that while Musk has missed deadlines, he has a unique ability to inspire investors and maintain high stock valuations. Analyst Gordon Johnson, one of the harsher critics of Tesla, said, "Elon Musk is a master manipulator. He's been able to keep the stock elevated. The reason the board is paying him is he's willing to say things that other CEOs aren't willing to say or get away with."
