Tesla’s board of directors has outlined a new compensation plan that could see CEO Elon Musk receive nearly $1 trillion if the company achieves unprecedented growth milestones, according to an Associated Press report.
The proposed package is contingent on Tesla’s market capitalization reaching $8.5 trillion within the next decade, alongside operational goals such as deploying 1 million fully self-driving robotaxis.
To get his first package of shares equivalent to 1% of the company, Musk would have to convince investors in the stock market that Tesla is worth $2 trillion in total, double what they value it today, and also hit several other milestones. To receive all the shares offered and make him the world’s first trillion-dollar man would require that market value to then rise to $8.5 trillion, double that of the world’s most valuable company now, chipmaker Nvidia.
Among other goals, sales of all Tesla vehicles would eventually also have to reach 20 million, nearly triple its entire sales since it was founded more than two decades ago. Musk would also have to vastly expand Tesla’s robot and robotaxi businesses by selling a million of the bots and a million of the driverless cabs, the latter a business that has only begun to roll out its taxi service and is behind rivals, such as Waymo.
Musk would also need to remain with Tesla for at least seven and a half years to cash out on any stock, and 10 years to earn the full amount.
Musk has been one of the richest people in the world for several years. He is currently estimated to be worth more than $400 billion by Forbes magazine.
A condition of the 11th and 12th tranches of the plan includes Musk coming up with a framework for someone to succeed him as CEO.
The plunge in Tesla sales this year was largely due to blowback over Musk’s affiliation with President Donald Trump. Tesla also faces intensifying competition from the big Detroit automakers and particularly from China.
Musk previously secured a historic $56 billion compensation package — the largest in corporate history — tied to ambitious performance targets. While he fulfilled those requirements, some shareholders challenged the payout as excessive, leading to a revised settlement of $29 billion.
Currently valued at around $1 trillion, Tesla remains well below Musk’s bold projection that the company could one day be worth $25 trillion through advances in electric vehicles, artificial intelligence, and autonomous transport.
For context, the world’s most valuable company today is NVIDIA, with a market capitalization of roughly $4 trillion.
AP with ANN
