Tesla Unveils Pay Package That Could Make Elon Musk World’s First Trillionaire

Tesla’s board approved a pay plan that could make Elon Musk the first trillionaire if he boosts the company’s value to $8.5 trillion by 2035. The package gives him up to 12% of Tesla’s stock, raising his control to at least 25%, but critics warn it sets a troubling precedent.

The board of directors of American electric carmaker Tesla announced on Friday a "super ambitious" pay package that has the potential to make Elon Musk the world’s first trillionaire — provided he achieves a series of aggressive growth targets.

According to a filing with the US Securities and Exchange Commission, Musk could earn up to 12% of Tesla’s total stock through 12 separate award packages spread over the next decade.

Musk is already ranked as the world’s wealthiest individual, according to Forbes’ real-time Billionaire tracker, with an estimated net worth of $437.8 billion. His fortune places him ahead of Oracle’s Larry Ellison, Meta’s Mark Zuckerberg, and Amazon’s Jeff Bezos.

At present, Musk controls 13% of Tesla shares, with an additional 6.7% locked in legal dispute. If the new pay structure is approved, his control would rise to at least 25%, contingent upon his commitment to remain with the company for the next seven years.

The proposed package highlights Musk’s increasing influence and control over Tesla — something he has long advocated for. This comes even as legal proceedings continue over his earlier 2018 compensation plan valued at $56 billion.

Musk’s focus, however, has been spread across multiple ventures. In addition to his role at Tesla, he serves as CEO and founder of the aerospace company SpaceX and owns the X social media platform. He also briefly worked as an advisor to former US President Donald Trump, before resigning from the role in May.

The new compensation plan, formally titled “A Super Ambitious Incentive Package for a Pioneering, Ambitious and Unique CEO”, was unanimously approved by Tesla’s board on Friday. The proposal will now be put before shareholders for a vote in November.

Industry analysts believe the package is designed both to prevent Musk from leaving Tesla and to motivate him to transform the company into a leader in artificial intelligence and robotics.

The plan immediately grants Musk 96 million shares of restricted stock valued at over $31 billion. These shares cannot be sold for a minimum of five years.

The filing further revealed that Musk has repeatedly threatened to leave Tesla, and the board expressed concern that much of the company’s AI talent could follow him if he were to depart.

“Musk also raised the possibility that he may pursue his other interests and leave Tesla if he did not receive such assurance,” the board stated.

To unlock the full reward, Musk will have to drive Tesla’s market capitalization to “at least $8.5 trillion by 2035,” according to the filing. For comparison, Tesla’s current market value stands just above $1 trillion.

In addition, the package lays out specific performance targets related to share price, operating profits, and production output.

Dan Coatsworth, an investment analyst at AJ Bell, criticized the proposal, warning that it could set a troubling precedent in corporate governance. He questioned whether Musk truly justified such a monumental pay arrangement.

“One minute Tesla’s board is considering whether Elon Musk is a liability to the company because of his outspoken views and political distractions, the next they are effectively saying ‘pick a number, any number’ to keep him tied down as long as possible,” Coatsworth said, as cited by Reuters.

“Surely Musk should be fighting to prove his worth to Tesla, rather than the board fighting to hold onto him?”

Meanwhile, Taufiq Rahim, a SpaceX investor and principal at 2040 Advisory, predicted that the proposal will likely win shareholder approval in November. However, he also cautioned that it raises broader societal concerns.

“It raises larger social questions about the outsized gains going to relatively few capital holders, which is likely not sustainable and will face public pressures,” Rahim told Reuters.