Tesla has unveiled a new compensation proposal for CEO Elon Musk that could potentially make him the world’s first trillionaire. The plan, disclosed in a recent proxy statement, would grant Musk nearly 424 million additional shares—contingent upon Tesla hitting a set of highly ambitious financial and operational targets.
The total value of the proposed shares, based on Tesla’s current stock price, stands at $143.5 billion. However, the full value could approach $1 trillion if Tesla achieves a market capitalization of $8.5 trillion, a figure that dwarfs its current valuation of $1.1 trillion. According to CNN, these shares would only be awarded if the company reaches the performance thresholds outlined in the proposal.
The new pay plan comes amid growing concerns about Musk’s focus and commitment to Tesla, given his involvement in several other ventures including xAI, SpaceX, and X, formerly known as Twitter. The board’s message is clear: to retain Musk’s attention and leadership, the company must offer extraordinary incentives. The package also marks Tesla’s second major attempt to compensate Musk at this scale, following a previous plan from 2018 that was invalidated by a Delaware court.
An Unprecedented Compensation Tied to Extreme Targets
Tesla’s board is proposing the largest executive compensation package ever seen in corporate history. If approved, Elon Musk could receive up to 423.7 million new Tesla shares. These shares, valued at $143.5 billion today, would be worth nearly $1 trillion if Tesla’s market capitalization reaches $8.5 trillion, as reported by CNN.
But the shares won’t be handed over easily. Musk must steer Tesla to a market cap far above the current record held by Nvidia, and also meet several operational targets. These include, but are not limited to, achieving $50 billion in adjusted operating income—up from the record $19.2 billion in 2022—and deploying a fleet of one million humanoid robots. Only then would the full share grant become available to him.
Currently, Musk owns around 410 million shares in Tesla, worth $139 billion. He also holds disputed rights to 304 million additional options from the 2018 plan, which a Delaware judge has twice ruled illegal despite shareholder approval. The latest proposal would bring Musk’s control closer to his stated goal of maintaining about 25% voting power at Tesla.
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Internal Concerns and Shareholder Tensions
The new pay package is not just about financial incentives. It’s also about influence and control. According to CNN, Tesla’s board emphasized the importance of keeping Musk focused on the company’s future by warning that he might “pursue other interests” without sufficient assurances. The board believes Musk alone possesses the leadership to realize Tesla’s long-term goals at an “unparalleled level.”
Still, the proposal has raised internal questions about governance and long-term planning. One of the conditions Musk must meet to secure the final 70 million shares is the establishment of a succession plan. Tesla’s board stated it is actively working on identifying internal and external candidates and maintains a “robust pipeline of seasoned leadership talent.”
Some investors are skeptical. Ross Gerber, CEO of Gerber Kawasaki and a former Tesla investor, said, “This is all about Musk being scared about being kicked out of Tesla because he only owns 13%.” Gerber has publicly expressed discomfort with the scale of the proposed compensation and has sold nearly all of his Tesla holdings.
Market Reaction and External Criticism
Despite the bold scope of the proposal, the market responded with moderate enthusiasm. Tesla’s stock rose approximately 5% in early trading following the announcement. But not everyone is convinced the goals are attainable—or grounded in reality.
Critics argue that the package could incentivize Musk to prioritize ambitious but unrealistic promises over fixing Tesla’s current challenges. The company is facing mounting competition from Chinese EV makers like BYD, which is expected to overtake Tesla in global EV sales, and can no longer rely on lucrative regulatory credit sales due to recent changes in US emissions law.
Analyst Gordon Johnson, known for his skepticism of Tesla, questioned the viability of the targets: “Is Tesla going to go to $8 trillion? Abso-f**king-lutely not.” Johnson also criticized Musk’s track record of overpromising, citing past claims about fully autonomous vehicles that have not materialized. According to him, Wall Street has consistently overvalued Tesla based on speculative future potential rather than delivered results.
