What are the details of Musk getting a pay package worth One Trillion Dollars?
Background on Elon Musk's Proposed $1 Trillion Tesla Pay Package Elon Musk's compensation at Tesla has long been tied to performance-based equity rather than a traditional salary, a structure in place since he became CEO in 2004. In 2018, shareholders approved a landmark 10-year package potentially worth up to $56 billion at the time, linked to ambitious market cap and operational milestones. However, a Delaware judge voided it in early 2024, ruling it unfair due to Musk's influence over the board and lack of transparency with shareholders. Shareholders re-ratified the 2018 package in May 2024 despite opposition from proxy advisors, and Musk is currently appealing the court's decision to the Delaware Supreme Court, with arguments heard in early October 2025. Amid this legal battle and Musk's growing involvement in other ventures (e.g., SpaceX, xAI, and political activities), Tesla's board proposed a new, even more expansive "mega performance equity award" in early September 2025. The goal is to secure Musk's long-term commitment to Tesla, particularly as the company pivots toward AI, autonomous vehicles, robotaxis, and humanoid robots—areas Musk claims will drive 80% of future value. Musk has publicly stated he needs at least 25% voting control to confidently advance these initiatives within Tesla, up from his current ~13-20% stake (bolstered by a $1 billion share purchase in September 2025). Without this, he has hinted at shifting focus elsewhere. The board views Musk's unique leadership as irreplaceable and believes the package aligns his incentives with massive shareholder value creation. Structure and Potential Value The proposed package grants Musk up to 423.7 million additional Tesla shares (about 12% of the company) over the next decade, vesting only if specific milestones are met. At current share prices (~$350-400 as of mid-October 2025), the shares are valued at around $148-170 billion. However, if Tesla achieves the full targets and shares appreciate accordingly, the package could be worth nearly $1 trillion—making it the largest ever for a public company CEO. This "astronomical" upside is performance-contingent, meaning Musk gets nothing upfront and shareholders benefit from the growth required to trigger vesting. Key Milestones To unlock the full package, Musk must hit a combination of financial and operational goals over 10 years. Here's a breakdown: | Milestone Category | Details | Current Status | |--------------------|---------|----------------| | Market Capitalization | Initial: Reach $2 trillion (nearly double current $1 trillion).Ultimate: $8.5 trillion (8x current value, twice the highest ever for any company). | Tesla's market cap fluctuates around $1 trillion; peaked at $1.2 trillion in late 2024. | | Adjusted Operating Profits | Achieve $400 billion (20x Tesla's previous record; or 24x last year's earnings). | Last year's profits were ~$15-20 billion; recent quarters show declines due to EV market slowdown. | | Autonomous Vehicles (Robotaxis) | Sell/deliver 1 million units. | Currently operates a few dozen in limited Austin, TX trials with human supervisors; full self-driving promised since 2014 but unmet. | | Humanoid Robots (Optimus) | Sell/deliver 1 million units. | Unveiled in 2022; Musk claimed 5,000 internal units by end-2025, but production delays persist. No external sales yet. | These targets are extraordinarily ambitious, reflecting Tesla's bet on disruptive tech amid challenges like falling EV demand and potential loss of U.S. tax credits post-October 2025. Voting and Shareholder Approval The package requires approval from Tesla shareholders at the annual meeting on November 5, 2025. Musk's voting power (at least 13.5%, potentially more after recent buys) likely ensures passage, as investors have historically backed his deals—seeing them as low-risk bets on explosive growth. Tesla's board strongly recommends approval, arguing it incentivizes Musk without upfront cost. Proxy statements were filed in September 2025, urging votes in favor. Opposition and Criticisms The proposal has drawn sharp backlash: Proxy Advisors: Leading firm ISS recommended a "no" vote on October 17, 2025, citing the package's "astronomical grant value," flawed design, and failure to address governance issues from the 2018 deal. (Glass Lewis has not yet weighed in as of this date.) Musk has fired back, accusing ISS of market manipulation and past wrong advice that shareholders ignored. Investors and Analysts: Critics like Ross Gerber (a major Tesla holder who sold most of his stake) call it "absurd" and driven by Musk's fear of ouster, pointing to repeated unfulfilled promises on autonomy and robotics. Analyst Gordon Johnson echoes this, labeling it Wall Street hype. Broader Societal Critique: Pope Leo XIV publicly condemned such executive pay in a September 2025 interview, highlighting the CEO-to-worker pay ratio (now 350:1) as fueling global unrest and eroding societal values. Musk's net worth (~$367 billion) amplifies these concerns. Tesla disputes the opposition, noting shareholders approved similar packages twice before and that success would enrich all owners. Current Status (as of October 17, 2025) The package is proposed but not yet approved or awarded—Musk must earn it through milestones, starting with the $2 trillion market cap threshold. The November 5 vote looms large, coinciding with Tesla's Q3 earnings release on October 22. The 2018 package appeal remains unresolved, potentially influencing the new one's fate. Tesla shares rose 6% after the September announcement but are down 12% from 2024 highs amid EV headwinds. If passed, this could propel Musk's wealth past $1 trillion, cementing his status while tying his fortune to Tesla's sci-fi ambitions.
