🔗 Share this article

Investors in the electric car maker assembled this Thursday to determine on a massive remuneration plan for CEO Elon Musk worth approximately nearly $1 trillion. If approved, this plan would signal market faith that the billionaire can guide the car company into an age defined by machine learning and robotics. If rejected, Tesla could potentially face the departure of a key figure who historically built the company name equivalent with electric vehicles.

Historic Targets and Market Capitalization

If the CEO meets the formidable targets specified in the remuneration deal revealed at Tesla's annual meeting, he could emerge as the world's first person with a trillion-dollar net worth. To accomplish this, he must lead Tesla to a monumental $8.5 trillion in company worth, which is eight times its current valuation. Moreover, he will be obligated to launch millions self-driving cars and humanoid robots, while sustaining the company's bottom line in the hundreds of billions of dollars over the next decade.

Compensation Structure

The primary objectives of the pay package, split into a dozen phases, delineate a path for Tesla to attain its massive valuation. Upon achievement, Musk would be in a position to benefit from an further 12% of the firm's equity. To qualify, he must remain vested with the company for at least 7.5 years. Additionally, he must help develop a corporate transition roadmap for the organization he has led for more than 20 years. The stock options awarded by the updated remuneration deal, alongside shares promised in his previous compensation plan, would result in Musk with 25 percent equity of Tesla's shares. In early November, Tesla stock was trading near its annual peak, at around $450 per share.

Lofty Goals

Throughout a ten years, Musk will be required to manufacture 20 million electric vehicles to buyers, distribute 10 million active full self-driving subscriptions, create and distribute 1 million humanoid robots, and introduce 1 million robotaxis in commercial service.

Musk will additionally be obligated to elevate the corporation to $400 billion in tangible revenue for four straight quarters. Tesla's tangible revenue for the July-September 2025 were $4.2 billion, a 9% decrease from the previous year.

By November, Musk's fortune was estimated at $460 billion, the highest in the world, based on wealth indexes.

Restoring a Rescinded Package

Stockholders are also reviewing a plan that would remunerate Musk after his 2018 compensation plan was voided by a judicial body in Delaware. The compensation package, estimated to be $56 billion, was challenged by a individual investor who won his case. The Delaware court of chancery rejected Musk's remuneration deal on two occasions. Upon stockholder approval the plan in the Thursday ballot, Musk is set to be paid the substantial payout regardless of if Tesla and Musk overturn the ruling of the case.

Subsequent to Musk's earlier remuneration deal was first rescinded, he moved Tesla's business registration from Delaware to Texas. He did the same with SpaceX and other companies' headquarters. In last year, per Texas statutes, shareholders for a second time voted to approve the compensation plan.

But Delaware's known as "court of equity" for a second time ruled against one of the most substantial CEO payouts in recent times. In the wake of that unfavorable ruling, Musk took to social media to voice displeasure with the state and its "activist chief judge", possibly sparking a wave of business departures that Delaware lawmakers have attempted to staunch with new laws.

In reviewing whether Musk had excessive control in being awarded that earlier remuneration deal, a respected academic expert observed that the court recognized that other "superstar CEOs" like the Meta chief and Amazon's Jeff Bezos were not awarded this type of performance-linked deals.