The announcement comes as Tesla grapples with declining global car sales and mounting competition in the electric vehicle market. Despite these headwinds, board chair Robyn Denholm insists that Musk is the only person fit to lead Tesla through its next phase.
The proposed compensation package has triggered sharp reactions, not only due to its scale, but also because it was introduced during a period of operational stagnation for Tesla. Still, Denholm reaffirmed the board’s trust in Musk, describing him in an interview as a “generational leader” uniquely suited for the job. “There aren’t any other people out there like Elon,” she said. “Once you decide who the leader should be, you need to put in place the compensation package to incent and motivate him.”
Compensation Plan Tied to Tenfold Increase in Company Value
The performance-based package hinges entirely on one metric: market value. If Musk succeeds in driving Tesla’s worth from its current $1 trillion to $8.5 trillion over a ten-year period, he stands to collect the full amount. The proposal was formally disclosed in a filing to the U.S. Securities and Exchange Commission.
Tesla’s board argues that such a payout structure is justified by Musk’s track record. “We’re measuring him on results,” Denholm told Bloomberg Technology. She also pointed to Musk’s past contributions, stating, “He’s delivered big time in the past, and we look forward to him doing that in the next era.” The board’s stance reflects a focus on long-term growth, even as short-term performance falters.
He Bought a $100K Mercedes for Just $34K — But The Hidden Issues Were Unbelievable
Weakening Sales and Falling Used Vehicle Values
According to The Cool Down, Tesla has reported a substantial decline in vehicle sales across major international markets. Simultaneously, the value of used Tesla cars has dropped significantly over the past year. These figures raise concerns about the company’s market position and its ability to maintain dominance in the EV sector.
The company is also facing intensified competition from emerging and established electric car manufacturers. While Tesla was once seen as an industry pioneer, rivals are now catching up—offering new models, improved battery technologies, and competitive pricing. This erosion of lead raises questions about the timing and optics of Musk’s proposed reward.
Pivot to AI Highlights Shifting Company Focus
As its automotive edge narrows, Tesla is increasingly pivoting toward artificial intelligence. This shift suggests a broader vision for the company beyond car manufacturing. As stated by Denholm, the transition will require a specific kind of leadership—one she believes only Musk can offer.
In her interview, Denholm argued that the compensation package was necessary to “motivate him to actually deliver against the ambitious goals.” With Tesla’s focus expanding, the board views the next decade as a transformative period, and Musk as its key architect.
