🔗 Share this article

Investors in the electric car maker gathered on Thursday to decide on a massive pay deal for the company's leader worth approximately around $1 trillion. Upon approval, this plan would showcase investor confidence that the tech magnate can guide the automaker into an period shaped by machine learning and automation. If rejected, Tesla could confront the departure of a visionary leader who historically built the corporation synonymous with zero-emission cars.

Historic Goals and Market Capitalization

Upon reaching the lofty targets outlined in the remuneration deal revealed at Tesla's shareholder gathering, he could be crowned the pioneering person with a trillion-dollar net worth. To reach this goal, he must guide Tesla to a monumental $8.5 trillion in company worth, which is eight times its existing market cap. Furthermore, he will be obligated to launch countless autonomous vehicles and bipedal machines, while sustaining the corporate profits in the hundreds of billions of dollars in the upcoming decade.

Reward System

The primary objectives of the pay package, split into twelve stages, outline a trajectory for Tesla to reach its massive valuation. If successful, Musk would be in a position to realize gains on an extra 12% of the corporation's shares. To qualify, he must remain vested with the firm for no less than 7.5 years. Furthermore, he is required to contribute to forming a future leadership strategy for the organization he has managed for more than 20 years. The equity incentives provided by the updated remuneration deal, combined with shares guaranteed in his earlier deal, would leave Musk with 25% ownership of Tesla's stock. As of early November, Tesla stock was trading close to its 52-week high, at around $450 each share.

Ambitious Targets

Throughout a decade, Musk will be required to manufacture 20 million electric vehicles to buyers, sell 10 million live FSD memberships, produce and launch 1 million humanoid robots, and deploy 1 million robotaxis in commercial service.

Musk will furthermore be obligated to bring the company to $400 billion in real profits for four straight quarters. Tesla's actual earnings for the July-September 2025 were $4.2 billion, a 9% decrease from the year before.

In November, Musk's personal wealth was valued at $460 billion, the highest in the planet, as reported by financial data.

Restoring a Rescinded Deal

Investors are also evaluating a plan that would compensate Musk after his 2018 compensation plan was overturned by a court in Delaware. The remuneration deal, valued at around $56 billion, was challenged by a sole shareholder who won his case. The Delaware court of chancery rejected Musk's pay package twice. If shareholders approve the proposal in Thursday's vote, Musk is set to be paid the massive amount irrespective of whether Tesla and Musk win an appeal of the lawsuit.

Following Musk's previous compensation plan was originally overturned, he transferred Tesla's corporate home to Texas from Delaware. He repeated the action with his aerospace company and additional corporate bases. In the previous year, under Texas law, shareholders once again approved the pay package.

But Delaware's so-called "judicial body" again rejected one of the biggest CEO compensation packages in recent times. In the wake of that negative decision, Musk used online platforms to voice displeasure with the state and its "prominent judicial figure", perhaps fueling a number of company relocations that Delaware lawmakers have attempted to staunch with new laws.

In reviewing whether Musk had excessive control in being granted that 2018 pay package, a noted academic expert observed that the judge acknowledged that other "high-profile executives" like Facebook's founder and Amazon's Jeff Bezos were not given this sort of performance-linked deals.