Tesla is asking its investors to approve a colossal new compensation plan for CEO Elon Musk, one that could ultimately be worth $975 billion, according to a regulatory filing released Friday. The proposal, which will go to a shareholder vote on November 6, would surpass Musk’s already record-breaking 2018 pay deal and, if approved, give him an even firmer grip over the electric carmaker’s future.
The plan is structured around twelve tranches of stock awards, each unlocked if Tesla hits a combination of financial and operational milestones over the next decade. For every half-trillion-dollar increase in Tesla’s market value, Musk would receive additional equity amounting to roughly one percent of the company, provided the company also meets demanding performance targets.
“If he performs, if he hits the super ambitious milestones that are in the plan then he gets equity,” Tesla chairwoman Robyn Denholm told CNBC. “It’s designed to keep him motivated and focused on delivering for the company.”
Musk, who currently owns about 13 percent of Tesla, would be awarded more than 423 million additional shares if the full package were realized. To unlock even the first tranche, Tesla would have to nearly double its current market capitalization to reach two trillion dollars. At the top end, the plan envisions a future in which Tesla is worth 8.5 trillion dollars, a valuation higher than Apple, Microsoft, and Saudi Aramco combined today.
The operational milestones are no less ambitious. Tesla would need to deliver 20 million vehicles, sign up 10 million customers for its Full Self-Driving subscription, deploy a million humanoid robots, and put a million robotaxis into commercial service, all while meeting aggressive profitability benchmarks measured by adjusted EBITDA.
Interestingly, the plan does not require Musk to devote a minimum amount of time to Tesla, even as he divides his focus across SpaceX, The Boring Company, Neuralink, and his newest artificial intelligence venture, xAI, which merged with his social media platform X earlier this year.
Alongside the pay package, Tesla said shareholders will also be asked to vote on whether the company should invest in xAI, which is building large language models and already operates a supercomputing data center in Memphis. Musk had floated the idea publicly last year, suggesting a five-billion-dollar investment in a poll on X.
This proposal comes against the backdrop of controversy. In early 2024, the Delaware Court of Chancery struck down Musk’s 2018 pay package, once valued at more than 55 billion dollars, in the case Tornetta v. Musk. The judge found that Musk had influenced the negotiations and that Tesla’s board failed to give shareholders key information before they voted. That award has since been rescinded, and the case remains on appeal.