Tesla’s board of directors has proposed a compensation plan for Chief Executive Elon Musk that could be worth up to $1 trillion, a record-shattering figure that would dwarf all previous corporate pay packages if shareholders approve it and Musk meets the ambitious performance goals tied to it.
The plan, unveiled in a last Friday filing, would grant Musk a series of performance-based stock awards over the next decade. If he succeeds in hitting the highest benchmarks, the deal would give him control of roughly 12 percent of Tesla’s outstanding shares, valued at about $1.03 trillion if the company’s market capitalization rises to $8.6 trillion.
The package marks the latest chapter in Tesla’s unconventional approach to executive pay. In 2018, the company granted Musk a compensation deal valued at $56 billion, which became the largest award in U.S. corporate history. That arrangement tied Musk’s compensation to Tesla’s growth in revenue and market value, but it was struck down by a Delaware judge earlier this year, who ruled the board had not exercised proper oversight in approving it. That legal battle remains ongoing.
The new plan echoes the earlier structure, tying compensation to a series of escalating milestones. Among the key goals are steep increases in market capitalization—an almost eightfold jump from current levels—along with ambitious operational achievements such as commercial deployment of autonomous robotaxis and scaling up production of humanoid robots.
Musk would also be required to stay in his leadership role for at least 7½ years and establish a formal succession plan before the highest-value portions of the package would vest. Those provisions reflect growing investor unease about Tesla’s reliance on Musk’s leadership and the lack of clarity about who might lead the company if he were to step aside.
Tesla shares rose about 3 percent Friday after the announcement, suggesting investors are cautiously optimistic about the proposal. Analysts say the deal may be eye-catching but is structured in a way that requires Tesla to deliver extraordinary results before Musk reaps any benefit.
Tesla chair Robyn Denholm, in a letter to shareholders, described Musk’s leadership as essential at what she called “a critical inflection point” for the company. She pointed to robotics, artificial intelligence and autonomous vehicles as the technologies expected to define Tesla’s next era of growth.
Supporters of the plan argue that Tesla must secure Musk’s commitment to remain at the helm while it navigates these ambitious bets. Dan Ives, an analyst at Wedbush Securities, called the figure “eye-popping” but said it represents the cost of ensuring Musk’s focus on Tesla during a period when his attention is divided among other ventures including SpaceX, xAI, and the social media platform X.
Skeptics, however, say the sheer size of the award highlights governance problems that have long surrounded Tesla. Critics argue Musk, already the company’s largest shareholder, hardly needs further incentives and that a deal of this scale could further entrench his control while diluting other shareholders.
Brian Quinn, a Boston College law professor who studies corporate governance, called the package “ridiculously large” and said it raised questions about whether Tesla’s board is fulfilling its fiduciary responsibilities. Tesla’s recent move to re-incorporate in Texas after years of litigation in Delaware also adds to the debate over oversight and accountability.
The package’s structure underscores the extraordinary targets Musk must achieve. For Tesla’s market capitalization to reach $8.6 trillion, the company would need to grow into a valuation greater than that of any company in history. Operationally, the plan hinges on technologies that remain largely unproven at scale, such as widespread robotaxi fleets and mass-market humanoid robots.
Despite those uncertainties, many investors appear willing to give Musk the benefit of the doubt. His track record of defying expectations—turning Tesla from a niche electric-car maker into the world’s most valuable automaker—has fostered confidence among supporters that he can once again deliver results others deem improbable.
The shareholder vote on the package is scheduled for Tesla’s annual meeting, expected to take place Nov. 6. Approval would mark a resounding show of confidence in Musk’s vision, though dissenting voices are likely to highlight concerns over concentration of power and the risk of rewarding goals that may prove unrealistic.
If approved and ultimately achieved, the deal could make Musk the world’s first trillionaire, cementing both his financial dominance and his sway over Tesla’s future. For a company that has repeatedly bet big on technologies years ahead of their time, the compensation plan reflects the same high-risk, high-reward philosophy that has defined Tesla’s rise—and Musk’s own career.