Tesla Inc. has proposed a new compensation plan for Chief Executive Elon Musk that could be worth about $1 trillion if all performance targets are met, according to a proxy filing released Friday.
The proposed package would be without precedent in corporate America and is intended to keep Musk at the helm of the electric-vehicle maker for the next decade.
Ambitious targets
The plan spans 10 years and ties Musk’s payout to a series of benchmarks.
These include expanding Tesla’s robotaxi business and growing the company’s market capitalisation to at least $8.5 trillion from about $1 trillion currently.
At that level, Tesla’s value would more than double that of Nvidia Corp., the world’s most valuable company at present.
The award is valued at $87.8 billion in the filing but could swell to roughly $1 trillion if Musk achieves all performance goals and receives the restricted shares.
If fully vested, the plan would increase Musk’s stake in Tesla to at least 25%, a threshold he has publicly said he wants to maintain.
Tesla’s response to court ruling
The proposal comes after Musk’s 2018 compensation package, valued at more than $50 billion, was struck down by a Delaware court.
While Tesla appeals that ruling, the board is seeking alternative ways to reward its CEO.
The filing also noted that Musk received an interim stock award in August valued at about $30 billion.
Tesla’s board has linked the new incentives to Musk’s involvement in the company’s long-term strategy, including robotics and artificial intelligence.
The proxy filing further specifies that Musk must take part in developing a framework for CEO succession to unlock the final two tranches of the award.
Shareholder proposal and broader commitments
Friday’s filing also contained a non-binding shareholder proposal for Tesla to take a stake in Musk’s artificial intelligence startup, xAI, an idea Musk has previously floated.
Musk, who has led Tesla since 2008, also runs SpaceX, Neuralink, the Boring Co., and xAI.
The new package highlights Musk’s influence over Tesla, even as he divides his time across several ventures.
Musk, 54, has pressed the board for a new agreement and warned he could pursue AI and robotics products outside Tesla if he does not secure around 25% voting control.
Tesla stock jumps 2%
Tesla stock rose 2% in early New York trading on Friday following the announcement, though the stock remains down 16% so far this year.
The company’s market value peaked in late 2024 at around $1.5 trillion.
Tesla has faced a turbulent period marked by political controversy surrounding Musk and operational setbacks.
Musk was the largest financial backer of Donald Trump’s election campaign last year and briefly led efforts to reshape the federal government.
The political activity contributed to backlash against Tesla, including sporadic vandalism at stores and charging stations.
The company has also endured weak operating results, reporting two of its worst quarters in years and a 13% drop in global vehicle deliveries in the first half of the year.
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