Tesla’s board of directors has unveiled a proposed compensation package for Elon Musk valued at nearly $1 trillion, in what would be the largest corporate pay deal in history.
The plan, which spans ten years, is designed to keep Musk focused on his role as chief executive of the electric vehicle maker. To unlock the full award, Tesla’s market capitalization would need to soar from its current $1 trillion to $8.5 trillion, making it the world’s most valuable company.
Under the proposal, Musk would be granted 12 tranches of shares tied to financial, operational, and technological milestones. These include achieving a cumulative production of 20 million vehicles, deploying one million Robotaxis, and delivering one million AI-powered humanoid robots. If fully realized, the deal would boost Musk’s stake in Tesla to at least 25 percent and give him greater voting power.
Tesla’s chairwoman, Robyn Denholm, and board member Kathleen Wilson-Thompson, said in a letter to shareholders that retaining Musk was “fundamental to Tesla achieving these goals and becoming the most valuable company in history.” They acknowledged the “formidable” nature of the targets but emphasized Musk’s “singular vision” as essential to guiding Tesla through what they described as a pivotal moment.
The first milestone under the package would require Tesla to almost double its valuation to $2 trillion, while also hitting production goals. Each tranche of equity would represent about 1 percent of Tesla’s value for every half-trillion dollars in market cap growth, alongside operational achievements, Denholm told CNBC.
The new plan comes as Musk faces pressure from investors to devote more attention to Tesla amid concerns he has become distracted by his political ambitions and ventures such as SpaceX, X (formerly Twitter), and AI startups.
Earlier this year, Tesla’s board approved an interim compensation package worth about $29 billion in restricted stock, aimed at retaining Musk through at least 2030 as the company pivots toward an AI-first strategy.
The proposal follows legal challenges to Musk’s previous 2018 pay package, a $56 billion deal struck down by the Delaware Court of Chancery, which ruled it was excessive and improperly approved. Musk is currently appealing that decision, arguing the court erred in rescinding a plan that shareholders had twice voted to approve.
