Elon Musk, the world’s richest person, may soon achieve another milestone. Tesla’s board has unveiled a record-breaking pay package that could make him the first trillionaire if the company reaches historic growth targets.
The deal mirrors his earlier package, once seen as out of reach but later surpassed by Tesla’s rapid rise. Now, the board is betting again on Musk’s ability to deliver.
Stock rewards tied to bold targets
The new package gives Musk the chance to claim 423.7 million additional Tesla shares, worth $143.5 billion today. To unlock the full payout, Tesla must soar to a $8.5 trillion market capitalization.
That figure is nearly eight times its current $1.1 trillion valuation. If achieved, Musk’s reward would be worth nearly $1 trillion on its own.
At that level, Tesla would overtake Nvidia and become the most valuable company ever, even though Toyota sells more cars and makes higher profits.
Proposal to connect Tesla with xAI
The filing also contained a shareholder proposal for Tesla to invest in xAI, Musk’s artificial intelligence company. The plan gave no details on how much or at what price.
XAI recently bought X, the platform Musk acquired in 2022 for $44 billion. A Tesla stake could increase Musk’s influence while also enriching the company.
Musk’s empire and legal fights
Musk owns 410 million Tesla shares worth $139 billion. With stakes in SpaceX, xAI, and other ventures, his wealth stands at $378 billion, according to Bloomberg.
He also holds disputed options for 304 million more shares under a 2018 deal struck down twice by a Delaware court. Tesla continues to push for their reinstatement, which would lift Musk’s stake to 18%.
Tesla’s stock nearly doubled after the 2024 election but dropped after protests, weaker sales, and declining profits. Shares remain 26% below their December highs.
Betting on robotaxis and robots
Musk says Tesla’s future rests on self-driving cars and a robotaxi service. He promises these vehicles will create vast new revenue streams and allow owners to rent them out.
He has also pledged humanoid robots, which he claims could even outpace Tesla’s car business.
Analysts see necessity
“It’s a massive package, but Tesla needs Musk,” said Dan Ives of Wedbush Securities. He argued Musk is central to Tesla’s future in artificial intelligence.
The board called Musk’s leadership unique and essential. It also disclosed that Musk raised the possibility of focusing on other ventures without stronger incentives.
Still, Tesla is preparing for leadership changes. Musk must design a CEO succession plan to unlock the final 70 million shares.
Preparing for succession
Tesla said it regularly reviews succession planning, both for emergencies and longer-term needs. It highlighted a strong internal talent pipeline while considering outside candidates as well.
Musk takes no salary. His past compensation came only from stock grants, leaving him unpaid since 2017 because of court disputes. By contrast, Jeff Bezos and Mark Zuckerberg built their fortunes solely from their founding stakes without additional grants.
Musk demands control
Musk insists he needs 25% control of Tesla’s shares to guide the company’s role in AI and robotics. Without that influence, he suggested he may build products outside Tesla.
Investor Ross Gerber argued Musk fears losing control. He criticized the deal’s size but admitted it could be justified if Tesla hits the ambitious goals.
Critics raise doubts
If Tesla climbs to $8.5 trillion, Musk’s fortune would swell by nearly $1 trillion from his current holdings alone. But he will not gain a single new share until Tesla first reaches $2 trillion and meets tough operational goals, such as deploying one million robots or hitting $50 billion in adjusted operating income.
Skeptics point to Musk’s history of overpromising. Since 2014, he has repeatedly said fully autonomous cars were just a year away. Analyst Gordon Johnson accused him of inflating Tesla’s stock with bold but unrealized claims.
Critics also warn that the package may drive Musk toward hype rather than fixing Tesla’s challenges. Chinese rival BYD is closing in on global EV sales leadership, while Tesla faces the loss of regulatory credit revenues in the US.
Johnson dismissed the deal entirely. “Tesla will never hit $8 trillion,” he said.
Tesla shares rose about 5% in early trading after the announcement.
