🔗 Share this article

Investors in the electric car maker convened on Thursday to determine on a substantial pay deal for CEO Elon Musk estimated at close to $1 trillion. Upon approval, this plan would demonstrate market faith that the tech magnate can guide the automaker into an period dominated by AI technology and automation. Should it fail, Tesla could confront the departure of a key figure who once made the company name synonymous with EVs.

Historic Goals and Company Valuation

Should Musk achieve the lofty objectives specified in the remuneration deal introduced at Tesla's shareholder gathering, he could emerge as the pioneering trillionaire. For this to happen, he must guide Tesla to a staggering $8.5 trillion in market capitalization, which is 800% of its existing market cap. Additionally, he will be tasked to deploy numerous driverless automobiles and humanoid robots, while upholding the corporate profits in the massive revenue figures over the next decade.

Compensation Structure

The main goals of the remuneration structure, divided into 12 tranches, chart a path for Tesla to achieve its enormous market capitalization. If successful, Musk would be in a position to cash in an further 12% of the corporation's shares. For this to occur, he must remain vested with the company for no less than 7.5 years. He will also help develop a long-term succession plan for the enterprise he has led for more than 20 years. The stock options awarded by the updated remuneration deal, in addition to shares assured in his earlier deal, would grant Musk with 25% ownership of Tesla's shares. By the start of November, Tesla equity was priced near its annual peak, at around $450 per share.

Lofty Goals

Throughout a ten years, Musk will be tasked to deliver 20 million EVs to customers, sell 10 million live FSD memberships, develop and sell 1 million advanced androids, and deploy 1 million self-driving cabs in commercial service.

Musk will also be required to increase the firm to $400 billion in real profits for four straight quarters. Tesla's actual earnings for the third quarter of 2025 were $4.2 billion, down 9% from the previous year.

As of November, Musk's personal wealth was estimated at $460 billion, the top in the world, based on wealth indexes.

Reviving a Rescinded Package

Investors are additionally reviewing a plan that would reward Musk after his previous pay package was overturned by a judicial body in Delaware. The remuneration deal, worth an estimated $56 billion, was disputed by a single stockholder who won his case. The Delaware court of chancery denied Musk's remuneration deal on two occasions. Should investors pass the proposal in the shareholder meeting, Musk is expected to be granted the massive amount irrespective of whether Tesla and Musk win an appeal of the legal matter.

Subsequent to Musk's previous compensation plan was initially invalidated, he moved Tesla's legal headquarters out of Delaware and into Texas. He followed suit with SpaceX and other business entities. In the previous year, according to Texas regulations, shareholders again approved the remuneration deal.

But Delaware's known as "judicial body" once again denied one of the biggest CEO compensation packages in contemporary business. After that negative decision, Musk posted on his accounts to voice displeasure with the state and its "prominent judicial figure", perhaps igniting a series of corporate exits that Delaware lawmakers have sought to curb with regulatory measures.

In reviewing whether Musk had undue influence in being awarded that earlier remuneration deal, a noted legal scholar remarked that the court acknowledged that other "superstar CEOs" like the Meta chief and the e-commerce pioneer were not granted this sort of performance-linked deals.