Tesla’s board, which has already compensated CEO Elon Musk more than the company earned through its entire existence, is now offering a new pay package worth up to $1 trillion.
Today, Tesla filed its proxy statement ahead of its shareholders’ meeting in November, and there’s a lot in there, but the headline-stealing item is a new compensation plan being proposed for the company’s controversial CEO, Elon Musk.
Musk saw his previous compensation plan, worth $55 billion, the biggest ever for a CEO, rescinded by a judge who found Musk to have negotiated, or more accurately, not negotiated, against a board under his control.
To compensate him, the board gave Musk a pay package worth $26 billion last month and said that a bigger, longer-term package would also be submitted for shareholders’ approval soon.
Now, Tesla has submitted the new compensation package for shareholders’ approval, and in short, it would give Musk, who is already Tesla’s largest shareholder, about $1 trillion more in stock options.
To receive the grant, Tesla would need to increase its market cap to roughly $8.5 trillion and achieve some milestones, such as putting 1 million Robotaxis into operation and delivering over 1 million robots.
Tesla board members Robyn Denholm and Kathleen Wilson-Thompson wrote in a letter to shareholders:
We’re asking you to approve the 2025 CEO Performance Award. In designing the new performance award, we explored numerous alternatives. Ultimately, the new award aims to build upon the success of the 2018 CEO Performance Award framework, which ensured that Elon was only paid for performance delivered and incentivized to guide Tesla through a period of meteoric growth. The 2025 CEO Performance Award similarly challenges Elon to again meet a series of even more aspirational goals, including operational milestones focused on reaching Adjusted EBITDA targets (thresholds that are up to 28 times higher than the 2018 CEO Performance Award’s top Adjusted EBITDA milestone) and rolling out new or expanded product offerings (including 1 million Robotaxis in commercial operation and delivery of 1 million AI Bots), all while growing the company’s market capitalization by trillions of dollars.
Tesla’s shareholders meeting is going to be held on November 6, 2025.
Electrek’s Take
Musk is already the person who benefits the most from Tesla’s stock by a long shot. He would be benefiting even more if he hadn’t sold tens of billions worth of stock to buy an overpriced Twitter, but that was his own decision.
Now, he managed to convince the board, which is obviously still fully under his control, to give him a new pay package worth up to $1 trillion, as Tesla’s sales have been going down two years in a row and earnings are in a steady decline for coming up on 3 years in a row now.
The craziest thing is that Tesla shareholders are going to happily give him the money and hope that he can pump Tesla’s stock enough to get paid.
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