Tesla seeks to offer Elon Musk a $1 trillion compensation plan, contingent on the achievement of ambitious objectives within a decade.

Tesla Announces Groundbreaking Compensation Package for Elon Musk

Tesla has unveiled a new compensation package for its CEO, Elon Musk, that could be worth a staggering $1 trillion if the company achieves its ambitious goals. The proposed plan, detailed in Tesla's proxy statement ahead of the shareholder meeting on November 6, is structured across 12 tranches of stock awards.

The package is designed not just as a financial incentive but also as a mechanism to secure Musk's leadership. The board argues that the award is essential to keep Musk's focus on Tesla during what it describes as a pivotal period of growth.

To unlock the stock awards, Tesla must simultaneously achieve steep financial and operational benchmarks. Musk must remain at Tesla for at least 7.5 years to claim any shares and for the full 10 years to access the maximum payout.

The requirements for unlocking the stock awards include delivering 20 million vehicles annually, reaching a market capitalization of at least $8.5 trillion, deploying one million robotaxis, and producing one million Optimus robots. These conditions trigger a performance-based compensation package paid in Tesla shares worth up to nearly 900 billion dollars.

If all milestones are achieved, Musk's Tesla holdings would expand his voting power to around 25%. This would dwarf even Musk's controversial 2018 pay deal, once valued at around $55 billion, which is currently under appeal.

The agreement also requires Musk to help the board establish a CEO succession framework, particularly tied to the final tranches of the award. To unlock the final tranches, Musk must ensure a smooth transition of leadership to a successor who can continue Tesla's growth trajectory.

The proposed compensation package has received a positive response from the market, with Tesla shares up nearly 3% in morning trading following the announcement. The full details of the compensation package, including the CEO succession framework, can be found in the provided link.

The scale of these targets reflects Tesla's ambitions to move far beyond electric cars into autonomous driving, robotics, and artificial intelligence. The company's ambitions are as ambitious as the compensation package designed to drive them forward.