Elon Musk, already the world’s richest person, could become the first trillionaire. Tesla’s board unveiled a record-setting pay package to keep him focused amid growing competition and market challenges.
The plan builds on Musk’s previous package, which many doubted but Tesla exceeded ahead of schedule. The board now hopes to push him toward even greater growth.
Stock rewards tied to unprecedented goals
Musk could receive 423.7 million additional Tesla shares, worth $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 nearly $1 trillion.
Tesla would surpass Nvidia as the most valuable company ever, even though Toyota sells more cars and earns higher profits.
Proposal for Tesla to invest in xAI
The filing also suggested Tesla take a stake in xAI, Musk’s artificial intelligence company. It did not specify the size or price of any investment.
XAI recently purchased X, the platform Musk acquired in 2022 for $44 billion. Any Tesla stake could increase Musk’s influence while benefiting the company indirectly.
Musk’s fortune and legal challenges
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 later fell amid protests, weaker sales, and declining 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 cars for autonomous rides, generating new revenue streams.
He also promises humanoid robots that could eventually surpass Tesla’s automotive business.
Analysts back the package
“It’s a massive deal, but Tesla must retain Musk,” said Wedbush analyst Dan Ives. He emphasized Musk’s key role in Tesla’s AI and technology initiatives.
The board agreed, calling Musk’s leadership unmatched. The filing noted Musk warned he might pursue other ventures without new incentives.
Tesla is also preparing for succession. Musk must create a CEO transition plan to unlock the final 70 million shares.
Preparing for leadership continuity
Tesla confirmed it regularly reviews succession planning for emergencies and long-term needs. It praised its internal talent pipeline while also considering external candidates.
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 says he must hold 25% of Tesla’s voting shares to guide AI and robotics strategy. Without that 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 could be justified if Tesla hits ambitious targets.
Lofty goals invite skepticism
If Tesla reaches $8.5 trillion, Musk’s holdings could rise nearly $1 trillion. But he gains nothing until Tesla first hits $2 trillion and meets milestones, including one million robots or $50 billion in adjusted operating income.
Critics highlight Musk’s history of overpromising. Since 2014, he 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 may push Tesla toward hype rather than solving core challenges. Chinese rival BYD is close to surpassing Tesla in global EV sales.
Recent US rules also removed Tesla’s regulatory credit revenue, adding further pressure.
Johnson dismissed the plan entirely. “Tesla will never hit $8 trillion,” he said.
Tesla shares rose about 5% in early trading following the announcement.
