Elon Musk, already the world’s wealthiest individual, may become the first trillionaire. Tesla’s board has proposed a historic compensation package to keep him focused as the company faces growing competition and market pressures.
The plan follows Musk’s previous package, which many doubted but Tesla exceeded ahead of schedule. The board now aims to push him toward even greater growth.
Stock rewards tied to ambitious goals
Musk could receive 423.7 million additional Tesla shares, valued at $143.5 billion today. He will earn them only if Tesla reaches an $8.5 trillion market capitalization.
That figure is nearly eight times Tesla’s current $1.1 trillion valuation. If realized, Musk’s new shares alone could be worth almost $1 trillion.
Tesla would surpass Nvidia as the world’s most valuable company, even though Toyota sells more cars and earns higher profits.
Proposal for Tesla to invest in xAI
The filing included a shareholder proposal for Tesla to take a stake in xAI, Musk’s artificial intelligence company. The plan did not reveal size or cost of any investment.
XAI recently purchased X, the platform Musk acquired in 2022 for $44 billion. Any Tesla stake could further expand Musk’s influence and benefit the company indirectly.
Musk’s fortune and legal hurdles
Musk owns 410 million Tesla shares valued at $139 billion. Combined with stakes in SpaceX, xAI, and other ventures, Bloomberg estimates his net worth at $378 billion.
He also holds options for 304 million more shares from a 2018 package, twice struck down by Delaware courts. Tesla is trying to reinstate them, which could increase Musk’s stake to 18%.
Tesla shares nearly doubled after the 2024 election but fell due to protests, weaker sales, and declining profits. Shares remain 26% below their December peak.
Betting on robotaxis and humanoid robots
Musk says Tesla’s growth depends on self-driving robotaxis. Owners could rent their cars for autonomous rides, generating new revenue streams.
He also promises humanoid robots that could eventually surpass Tesla’s automotive business.
Analysts defend the plan
“It’s a huge package, but Tesla must retain Musk,” said Wedbush analyst Dan Ives. He emphasized Musk’s critical role in Tesla’s AI and technology initiatives.
The board agreed, describing Musk’s leadership as unmatched. The filing noted Musk warned he might pursue other ventures without stronger incentives.
Tesla is preparing for succession. Musk must create a CEO transition plan to unlock the final 70 million shares.
Preparing for leadership continuity
Tesla said it regularly reviews succession planning for emergencies and long-term needs. It praised its internal talent pipeline while also considering external candidates.
Musk receives no salary. His compensation comes entirely from stock and options, leaving him unpaid since 2017 due to legal disputes. In contrast, Jeff Bezos and Mark Zuckerberg relied solely on their founding stakes without additional grants.
Musk insists on control
Musk says he must hold 25% of Tesla’s voting shares to guide AI and robotics strategy. Without that influence, he may pursue projects outside Tesla.
Investor Ross Gerber said the package reflects Musk’s fear of losing control. He criticized its size but admitted it could be justified if Tesla meets ambitious targets.
Ambitious targets draw skepticism
If Tesla hits $8.5 trillion, Musk’s holdings could rise nearly $1 trillion. But he earns nothing until Tesla first reaches $2 trillion and meets goals like one million robots in operation or $50 billion in adjusted operating income.
Critics point to Musk’s history of overpromising. Since 2014, he has repeatedly claimed fully autonomous cars were imminent. Analyst Gordon Johnson accused him of inflating Tesla’s stock with bold but unfulfilled statements.
Others warn the package may encourage hype rather than solving core challenges. Chinese rival BYD is close to surpassing Tesla in global EV sales.
New US laws have also removed Tesla’s regulatory credit revenue, creating additional pressure.
Johnson dismissed the plan outright. “Tesla will never hit $8 trillion,” he said.
Tesla shares rose about 5% in early trading after the announcement.
