Tesla has submitted a proposal for another massive compensation package for its CEO, Elon Musk, totaling a potential $975 billion based on maximum payout. This ambitious plan, detailed in a Friday financial filing, outlines 12 tranches of shares to be granted contingent upon Tesla achieving specific market capitalization and operational targets over the next 10 years. The plan also significantly increases Musk’s voting power within the company, a move he has publicly advocated since early 2024.
Tesla Chairwoman Robyn Denholm defended the proposal, stating on CNBC that it aims to keep Musk “motivated and focused” on delivering for the company. She explained the structure, emphasizing that equity is granted in increments of 1% for every half-trillion-dollar increase in market cap, alongside the achievement of operational milestones. The final benchmark requires a staggering $8.5 trillion market cap.
These operational milestones for 2025 alone include delivering 20 million vehicles, securing 10 million Full Self-Driving (FSD) subscriptions, delivering 1 million Optimus robots, and achieving 1 million Robotaxis in commercial operation, along with various adjusted EBITDA targets. Musk himself has previously suggested that Optimus robots could propel Tesla to a $25 trillion valuation. The proposal’s unveiling comes amidst a multi-quarter sales slump for Tesla, attributed to factors including competition from Chinese automakers and negative consumer sentiment stemming from Musk’s public pronouncements.
The new compensation plan follows a Delaware court ruling that deemed Musk’s 2018 compensation plan excessive and improperly granted. That plan, ultimately worth $56 billion, was the largest public executive compensation plan in U.S. history. Tesla is also requesting shareholder approval to invest in Musk’s xAI venture, a proposal initially floated in an informal X poll last July. The company, which merged with X earlier this year, operates a large data center in Memphis and is planning a significant expansion to support its AI development. Tesla shareholders will vote on both the compensation plan and the xAI investment on November 6th.
