Tesla has proposed an unprecedented pay plan for CEO Elon Musk, seeking shareholder approval for a package that could be worth nearly $975 billion if all performance milestones are achieved and share counts remain stable. The plan would award Musk up to 12 tranches of shares over the next decade, contingent on reaching ambitious market capitalization and operational goals, while also increasing his voting power within the company.
Tesla Chairwoman Robyn Denholm explained that the plan is designed to keep Musk “motivated and focused on delivering for the company.” Each tranche corresponds to significant market cap growth, starting with $2 trillion for the first award and reaching $8.5 trillion for the final tranche. Operational targets include delivering 20 million Tesla vehicles, achieving 10 million active Full Self-Driving subscriptions, producing 1 million robots, operating 1 million Robotaxis commercially, and meeting a series of adjusted EBITDA benchmarks.
If fully realized, Musk would receive more than 423 million additional shares, adding to his current 13% stake. The plan does not mandate a minimum time commitment from Musk or restrict how he allocates his attention among his various ventures, which include SpaceX, Neuralink, The Boring Company, and xAI, his artificial intelligence and social network merger project. Tesla will also ask shareholders at its November 6 meeting to vote on investing in xAI, a venture Musk first discussed publicly last July, which now operates a large data center in Memphis and plans additional facilities to support AI training and operations.
The proposal comes amid a multi-quarter sales slump at Tesla, driven by aging models, growing competition from Chinese EV manufacturers, and consumer backlash related to Musk’s public political statements. It also follows legal scrutiny over Musk’s previous 2018 pay plan, which Delaware courts ruled excessive and improperly granted, requiring rescission. That plan, tied to market cap and operational milestones, was valued at $56 billion when it vested, making it the largest executive compensation package in U.S. history.
Musk, Denholm, and allies have criticized the court ruling, and Tesla even relocated its incorporation from Delaware to Texas in response. While the 2018 plan is under appeal, the new pay structure reflects Tesla’s strategy to incentivize long-term growth, especially in areas Musk predicts could contribute significantly to the company’s future value, including the Optimus robotics project. Denholm emphasized that the plan aligns Musk’s incentives with Tesla’s long-term objectives, aiming to secure continued innovation and operational performance over the next decade.
READ MORE: