Historic Compensation Package for Tesla CEO
Tesla's board has proposed an unprecedented $1 trillion compensation package for CEO Elon Musk, contingent on achieving a series of ambitious performance targets over the next decade. The package would make Musk the first executive in history to potentially earn a trillion-dollar compensation.
Performance Milestones
To qualify for the full award, Musk must achieve 12 market and operational milestones, including increasing Tesla's market value eightfold to $8.5 trillion - more than double the current value of Nvidia, the world's most valuable company. Additional requirements include selling one million artificial intelligence robots and 12 million additional Tesla vehicles, while also increasing one of Tesla's earnings figures 24-fold.
Compensation Structure
Musk would not receive a traditional salary or bonus. Instead, he would be gradually awarded Tesla shares in 12 tranches as he achieves each milestone. The first milestone requires Tesla's market value to double to $2 trillion. The final market value target of $8.5 trillion represents what would be the largest corporate valuation in history.
Board Justification
Tesla chair Robyn Denholm defended the proposal, stating: "Growth that may seem impossible today can be unlocked with new ideas, better technology and greater innovation. Simply put, retaining and incentivising Elon is fundamental to Tesla achieving these goals and becoming the most valuable company in history."
Recent Context
The proposal comes just months after Musk received $29 billion in shares following a court ruling that struck down his previous $50 billion compensation package for being "unfair to shareholders." Tesla's sales have been falling at their fastest rate in a decade, with some experts attributing the decline to Musk's "toxic" reputation and political distractions.
Analyst Criticism
Investment analyst Dan Coatsworth called the proposal "beggars belief," questioning whether one person is worth that much. He noted that Musk "presides over a company that has lost its edge, is being overtaken by rivals, and whose brand has been tarnished by Musk's actions outside of Tesla."
The compensation package will require shareholder approval and represents one of the most ambitious executive compensation plans ever proposed in corporate history.