Elon Musk could become the world’s first trillionaire if Tesla shareholders approve a new pay package that was just put forward by the company’s board.
Musk would need to meet certain milestones in order to receive that eye-popping compensation, such as producing 1 million robotaxis and 1 million humanoid robots, as well as increase Tesla’s valuation by trillions of dollars. Musk, already the world’s richest man, would ascend to new heights of financial untouchability if he is able to achieve these goals.
The proposal builds on an interim award of $29 billion that was announced last month. In total, the package is worth approximately $975 billion based on maximum payout. And it would give Musk more control over the company, which he has demanded in order to achieve his vision for AI-powered cars and robots.
Musk would need to meet certain milestones in order to receive that compensation
This isn’t the first time that Tesla has tried throwing a bunch of cash at Musk to keep him focused on the company. The company offered him a pay package worth more than $50 billion in 2018, but last year a Delaware court voided it, arguing that the deal was flawed and unfair to shareholders and that Musk held undue influence over its composition. Shareholders had voted twice to approve the hefty compensation, but the judge still upheld their ruling that blocked it. Tesla has appealed the decision to the Delaware Supreme Court.
Now, the company is asking shareholders to approve this new award, arguing that Tesla is on the cusp of becoming a leader in AI and robotics, requiring Musk’s steady hand on the helm.
“We believe that Elon’s singular vision is vital to navigating this critical inflection point,” Tesla board chair Robyn Denholm wrote in a letter to shareholders. “We also recognize the formidable nature of this undertaking and as a result, the importance of having a leader who is not only willing and capable but eager to meet this challenge.”
The pay package amounts to a huge vote of confidence at a time when Musk’s political meddling has taken an enormous toll on the electric car company that is the source for his vast wealth. Tesla’s sales have declined significantly across the globe as rising competition from China, as well as Musk’s vocal support for far-right politics, have diminished the company’s brand. And yet, Tesla’s stock has always outperformed its reality as an electric car and renewable energy company, which has led some critics to deride it as meme stock.
To secure this vast payout, Musk would need to stay as CEO of Tesla for at least seven years, or up to 10 years in order to receive the full amount. During that time, he would need to deploy 1 million robotaxis into commercial service, as well as 1 million Optimus robots, all while growing the company’s market capitalization by trillions of dollars and creating “nearly $7.5 trillion in value for shareholders.” Musk and his brother Kimbal, both board members, recused themselves from the proposal, according to the filing.
After years of growth, the sudden reversal in Tesla’s fortune has left many investors and supporters with whiplash. As Musk slid deeper into politics, investors urged him to stay focused on Tesla and its costly — and questionable — project to build more self-driving cars and humanoid robots. The company rolled out its first robotaxi service in Austin, Texas, this summer — although the service fell short of Musk’s earlier predictions. The company’s only new product since 2020, the Cybertruck, has widely been considered a flop. And competition from legacy automakers, especially those in China, has been sapping Tesla’s resources.
Musk is currently Tesla’s largest shareholder, with a 13 percent stake in the company. But the CEO has said that he wants more control over the company in order to have more sway over its mission — which this plans aims to produce.
“That is a major concern for me, as I’ve mentioned in the past, and I hope that is addressed at the upcoming shareholders meeting,” Musk said in a recent earnings call, in response to a question about his voting stake. “I think my control of Tesla should be enough to ensure that it goes in a good direction, but not so much control that I can’t be thrown out if I go crazy.”
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