Tesla Cybertruck joins California Police Fleet
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Tesla’s TSLA.O board proposed a $1 trillion compensation plan to CEO Elon Musk. This will be the biggest corporate pay package in history, highlighting automakers looking to transform into AI and Robotics Powers.
The world’s wealthiest people have consistently sought a greater company’s interest in order to gain more control, even in the legal battle over the 2018 pay package (which was then valued at $56 billion). The newly proposed award is roughly 18 times larger than the contested plan, and is close to current market ratings.
The proposal underscores the board’s trust in Mask’s ability to guide the company in new directions while rekinking growth, despite its roots in Chinese rivals in key markets.
“The bold compensation tied to performance is not new, but the pure scale here sets up a new bar for CEO incentives and controls room discussions everywhere,” says Adam Sarhan, CEO of 50 Park Investments in New York.
Due to regulatory submissions, Musk is on a different plane than other technical executives.
Musk has transformed Tesla from a niche EV startup to the world’s most valuable automaker, expanding production, expanding globally, and pushing the industry into electric mobility while operating several other companies, including SpaceX and Xai.
Tesla’s board says a record-off is needed to concentrate and incentivize masks, but critics argue that as the company’s biggest shareholder, he is already well motivated and that the plan could exacerbate dilution and pose a risk of governance.
The board also said that if all targets are met, the new award could significantly raise his shares and would give him even greater control as Tesla attempts to become the most valuable company in the world.
The compensation plan does not impose any conditions on how much time you have to spend on Tesla.
“This is an incredibly big pay package. I’ll raise a lot of questions, but last year Musk moved Tesla from Delaware to Texas to avoid all of these questions.”
“I think they’ll approve this package given that Tesla stock is basically all vibes and that it seems to have little to do with the actual performance of the automaker.”
Reward details
The proposed plan grants Musk up to 12% of Tesla’s shares. This is worth around $1.03 trillion if the company’s target market value reaches $8.6 trillion. The plan would require Tesla to increase its valuation to almost eight times, or about $7.5 trillion over the next decade.
Musk said the Optimus Humanoid Robot could ultimately account for around 80% of Tesla’s value, predicting that it could support a company worth $25 trillion.
If earned in full, the award will effectively increase Musk’s voting power from his roughly 13% stake, strengthening discussions about governance and succession.
The board said the award would come with tranches related to both market capitalization mass production and operational milestones such as humanoid robots.
Tesla emphasized that Musk will receive all performance-related compensation and will not receive any salary or cash bonuses, reflecting the structure of the 2018 plan.
The company’s shares rose by about 3%.
Earlier this year, Tesla’s board approved a temporary remuneration package for musk, worth around $29 billion in limited stock.
Tesla has since been re-integrated into Texas and is suing Delaware’s ruling, but the company said the new plan reflects shareholder feedback and a stronger governance safeguard.
The submission also revealed that a special committee of independent directors will review the proposal and will be sent to a shareholder vote in November.
Political Crowd Focus
Musk’s advance into party politics and his willingness to challenge President Donald Trump has raised concerns among Tesla investors and analysts about potential distractions, and previously encouraged talks about finding a new chief.
In July, Musk announced plans to launch a third party, the American Party, following public clashes with Trump over tax cuts and government spending bills.
Tesla’s board urged shareholders to vote against a proposal calling for a political neutrality policy that would expand the board’s oversight of Musk’s political activities.
“We’re looking forward to seeing you in the future,” said Douglassia, president of Soundboard Governance, an independent corporate governance consulting company. “It’s ridiculous, so they’ll pass it on, I have no doubt.”
Reports by Akash Sriram, Shashwat Chauhan, Jaspreet Singh, Harshita Mary Varghese of Bengaluru and Ross Kerber of Boston. Edited by Saumyadeb Chakrabarty and Anil D’Silva
