🔗 Share this article

Tesla shareholders gathered on Thursday to decide on a enormous pay deal for CEO Elon Musk worth approximately nearly $1 trillion. Should it pass, this deal would signal market faith that the entrepreneur can lead the car company into an age dominated by AI technology and automation. If denied, Tesla could confront the exit of a visionary leader who once made the company name equivalent with electric vehicles.

Historic Milestones and Company Valuation

If the CEO meets the lofty milestones specified in the compensation plan presented at Tesla's corporate assembly, he could emerge as the world's first trillionaire. To accomplish this, he must guide Tesla to a staggering $8.5 trillion in company worth, which is eight times its existing market cap. Moreover, he will be obligated to deploy countless self-driving cars and advanced androids, while upholding the company's bottom line in the hundreds of billions in the upcoming decade.

Payment Breakdown

The primary objectives of the compensation plan, organized into 12 tranches, delineate a roadmap for Tesla to attain its colossal valuation. Upon achievement, Musk would be eligible to benefit from an further 12% of the firm's equity. To be eligible, he must maintain involvement with the firm for a minimum of 7.5 years. Furthermore, he is required to assist in creating a long-term succession plan for the enterprise he has headed for over 20 years. The share grants awarded by the latest pay package, in addition to shares assured in his previous compensation plan, would grant Musk with 25 percent equity of Tesla's stock. By the start of November, Tesla stock was trading approaching its annual peak, at around $450 each share.

Lofty Goals

Throughout a ten-year period, Musk will be required to manufacture 20 million electric vehicles to buyers, sell 10 million live FSD memberships, create and distribute 1 million humanoid robots, and launch 1 million robotaxis in commercial service.

Musk will also be tasked to increase the firm to $400 billion in real profits for four straight quarters. Tesla's tangible revenue for the third quarter of 2025 were $4.2 billion, a 9% decrease from the year before.

In November, Musk's net worth was valued at $460 billion, the leading in the world, according to financial data.

Reviving a Revoked Deal

Stockholders are also evaluating a proposal that would remunerate Musk after his previous pay package was overturned by a legal authority in Delaware. The pay plan, worth an estimated $56 billion, was contested by a single stockholder who succeeded legally. The Delaware court of chancery denied Musk's compensation plan on two occasions. Should investors pass the plan in Thursday's vote, Musk is likely to be awarded the substantial payout whether or not Tesla and Musk overturn the ruling of the lawsuit.

Following Musk's 2018 pay package was originally overturned, he relocated Tesla's legal headquarters to Texas from Delaware. He followed suit with SpaceX and additional corporate bases. In the previous year, according to Texas regulations, shareholders once again approved the remuneration deal.

But Delaware's so-called "judicial body" again rejected one of the biggest CEO pay deals in modern history. Following that unfavorable ruling, Musk used online platforms to voice displeasure with the state and its "activist chief judge", perhaps fueling a wave of business departures that Delaware officials have sought to curb with legislation.

In considering whether Musk had excessive control in being granted that 2018 pay package, a respected legal scholar observed that the judge noted that other "celebrity leaders" like Facebook's founder and the e-commerce pioneer were not granted this kind of incentive-based contracts.