Tesla has proposed a new $1 trillion compensation package for its chief executive Elon Musk, in what would be the largest corporate pay deal ever offered to a business leader. The plan, revealed this week, is designed to keep Musk focused on Tesla as it pursues its most ambitious transformation yet — from electric vehicle manufacturer to a global leader in artificial intelligence and robotics.
Under the proposal, Musk would receive 12 tranches of Tesla shares over the next decade, but only if the company meets a series of aggressive financial, production, and technological milestones. Should all targets be reached, Tesla’s market valuation could soar from its current $1 trillion to $8.5 trillion, potentially making it the world’s most valuable company and creating nearly $7.5 trillion in additional shareholder value.
The package requires Tesla to achieve landmark goals, including doubling its market capitalization to $2 trillion, delivering a cumulative 20 million vehicles, deploying one million autonomous Robotaxis, and producing one million AI-powered humanoid robots. Success would increase Musk’s personal stake in Tesla to at least 25%, consolidating his influence over the company’s future direction.
Board members say the extraordinary package is essential to securing Musk’s long-term leadership. “Simply put, retaining and incentivising Elon is fundamental to Tesla achieving these goals and becoming the most valuable company in history,” Tesla chairwoman Robyn Denholm and director Kathleen Wilson-Thompson told shareholders.
Speaking to CNBC, Denholm stressed the package is tied strictly to performance: “If he performs, if he hits the super ambitious milestones that are in the plan, then he gets equity. It’s 1 per cent for each half a trillion dollars of market cap, plus operational milestones.”
The proposal comes amid heightened scrutiny of Musk’s leadership style and outside interests. The deal includes a stipulation that Musk’s political activities “wind down in a timely manner,” a reflection of investor unease over his public clashes and recent split with U.S. President Donald Trump.
Musk’s compensation has long been a subject of debate. Earlier this year, Tesla approved an interim stock award valued at $29 billion to keep him in place through 2030. His previous 2018 pay deal, once worth up to $56 billion, was struck down by the Delaware Court of Chancery, which deemed it excessive and improperly approved. Musk is appealing that ruling, arguing the court wrongly overturned an agreement that shareholders had endorsed twice.
Despite the controversy, the 2018 plan drove Tesla’s meteoric rise over the past five years. Now, the board is wagering that an even larger and more ambitious award will secure Musk’s commitment as Tesla pushes into robotics, AI, and autonomous technologies.
Shareholders will vote on the new package in the coming months, in what could be a defining moment for both Tesla and its billionaire chief executive.
