Elon Musk, already the richest person on Earth, could become the first trillionaire. Tesla’s board has introduced a historic pay package to ensure he stays focused as the company faces rising competition and market pressures.
The plan builds on Musk’s previous package, which many doubted but Tesla exceeded ahead of schedule. The board now aims to push him toward even greater growth.
Massive stock rewards tied to ambitious targets
Musk could receive 423.7 million additional Tesla shares, valued at $143.5 billion today. He will earn them only if Tesla reaches an $8.5 trillion market capitalization.
That figure is nearly eight times Tesla’s current $1.1 trillion valuation. If realized, Musk’s new shares alone could be worth almost $1 trillion.
Tesla would surpass Nvidia as the world’s most valuable company, even though Toyota sells more cars and earns higher profits.
Tesla could invest in xAI
The proxy filing also suggested Tesla take a stake in xAI, Musk’s artificial intelligence company. The plan did not specify the size or price of any investment.
XAI recently acquired X, the platform Musk purchased in 2022 for $44 billion. Any Tesla stake could further expand Musk’s influence while benefiting the company indirectly.
Musk’s wealth and legal battles
Musk owns 410 million Tesla shares valued at $139 billion. Combined with stakes in SpaceX, xAI, and other ventures, Bloomberg estimates his net worth at $378 billion.
He also holds options for 304 million more shares from a 2018 package, twice struck down by Delaware courts. Tesla is pushing to reinstate them, which could raise Musk’s stake to 18%.
Tesla shares nearly doubled after the 2024 election but fell amid protests, declining sales, and weaker profits. Shares remain 26% below December’s peak.
Betting on robotaxis and humanoid robots
Musk predicts Tesla’s growth will come from self-driving robotaxis. Owners could rent their vehicles for autonomous rides, generating new revenue streams.
He also promises humanoid robots that could eventually surpass Tesla’s automotive business.
Analysts defend the package
“It’s a huge package, but Tesla must retain Musk,” said Wedbush analyst Dan Ives. He stressed Musk’s key role in Tesla’s AI and technology initiatives.
The board agreed, calling Musk’s leadership unmatched. The filing revealed Musk warned he might pursue other ventures without new assurances.
Tesla is also preparing for succession. Musk must create a CEO transition framework to unlock the final 70 million shares.
Planning for leadership continuity
Tesla said it regularly reviews succession planning for emergencies and long-term needs. It praised its internal talent pipeline while considering external candidates as well.
Musk receives no salary. His compensation comes entirely from stock and options, leaving him unpaid since 2017 due to legal disputes. By contrast, Jeff Bezos and Mark Zuckerberg relied solely on their founding stakes without additional grants.
Musk demands control
Musk insists on holding 25% of Tesla’s voting shares to guide AI and robotics strategy. Without that level of influence, he may pursue projects outside Tesla.
Investor Ross Gerber said the package reflects Musk’s fear of losing control. He criticized its size but acknowledged it may be justified if Tesla hits ambitious targets.
Lofty goals spark skepticism
If Tesla hits $8.5 trillion, Musk’s holdings could rise nearly $1 trillion. But he earns nothing until Tesla first reaches $2 trillion and achieves goals such as deploying one million robots or generating $50 billion in adjusted operating income.
Critics highlight Musk’s history of overpromising. Since 2014, he has repeatedly claimed fully autonomous cars were imminent. Analyst Gordon Johnson said Musk inflated Tesla’s stock with bold but unfulfilled claims.
Others warn the package could push Tesla toward hype rather than solving core challenges. Chinese rival BYD is close to surpassing Tesla in global EV sales.
Recent US laws also removed Tesla’s regulatory credit revenue, increasing pressure on the company.
Johnson dismissed the plan entirely. “Tesla will never hit $8 trillion,” he said.
Tesla shares rose about 5% in early trading after the announcement.
