Elon Musk’s Trillion Dollar Pay Hinges On A Bet That Could Break Tesla
- Elon Musk secures the largest pay package in corporate history.
- Around 75 percent of shareholders approved the $1 trillion deal.
- Musk must boost Tesla’s value and build 1 million AI robots.
Feeling smug about that 2 percent pay rise you just squeezed out of your boss? You won’t be when you hear that Tesla shareholders have voted to pay CEO Elon Musk up to $1 trillion over the next decade if the company hits a series of extremely ambitious market-value and performance milestones.
Around 75 percent of investors voted in favor of the award, which ties Musk’s payout to Tesla hitting long-term valuation goals rather than fixed salary or bonuses.
To access the full $1 trillion, Musk will need to boost the automaker’s market value from $1.4 trillion to $8.5 trillion and push it to make 20 million cars, a big jump from the 8.5 million it has produced in its lifetime.
Related: Yale Economists Quantify Exactly How Many Sales Musk’s Politics Cost Tesla
Other stipulations include achieving 10 million FSD subscriptions, putting 1 million Robotaxis on the street and delivering 1 million Optimus robots, CNBC reports.
The payout will happen in stages and won’t come in the form of giant check or pile of bills. Instead Musk will be awarded “hundreds of millions” of additional Tesla shares, which could lift his stake in the firm form 13 percent today – already making him the biggest single shareholder – to as much as 29 percent in a decade’s time.
The vote comes after senior Tesla’s board members publicly warned that without the deal, Musk might shift his focus elsewhere. This is a man, after all, with plenty of other gigs on the go, including SpaceX, Neuralink, and xAI, an OpenAI rival some Tesla shareholders want the automaker to invest in.
A controversial CEO
But the approval arrives at a delicate time for Tesla. Sales have been weaker than expected in key markets, despite the company recently giving the Model Y and Model 3 major updates meant to boost demand.
Prices have been cut repeatedly, margins have thinned, and both legacy Western brands and younger Chinese ones are now producing their own EVs and eating into Tesla’s pie.
And then there’s the Cybertruck. The stainless steel truck generated a ton of media coverage, but demand has failed to live up to the hype.
On top of that Tesla has been hit by multiple lawsuits about crashes allegedly related to its cars’ driver assistance tech, US regulators are also investigating the safety of those same systems and a recent study showed Musk’s right-wing affiliations have cost the company billions of dollars in lost sales.
Banking on AI
So why are shareholders still willing to back a jaw-dropping compensation deal? Two words: Robotaxi and AI. Musk has repeatedly said Tesla is on the brink of full self-driving automation and many investors believe only Elon Musk can lead that transformation.
If Musk can turn that vision into reality, the trillion-dollar pay plan suddenly stops sounding theoretical. But that’s a big if, and here’s another slightly smaller one: if you were a shareholder, would you have voted to approve Musk’s mega-pay package? Leave a comment and let us know.