Elon Musk Could Get $1 Trillion, But With One Condition: Make Tesla the Most Valuable Company in the World
Tesla’s board of directors plans to grant Elon Musk a $1 trillion fee package on the condition that he significantly increases the company’s value. The proposal, which still needs to be approved by investors, implies that Musk will not receive the payout all at once but in portions, as specific, extremely ambitious financial milestones are achieved over the next 10 years.
Key Terms and Goals
• No salary, only stock. Instead of a regular salary or bonuses, Musk will receive company shares. His stake will grow as he meets the set goals.
• Doubling the value. The initial target is to double Tesla’s market capitalization to $2 trillion. • Final goal. To receive the maximum payout, Musk must raise the company’s market value to $8.5 trillion. This would be more than double the current valuation of Nvidia, the world’s most valuable company.
• 12 stages. The fee will be paid in 12 installments. Each portion is tied to achieving a specific economic metric, including increased car and robot production, as well as a 24-fold revenue increase.
Why Is This Proposal Controversial?
• Risky investments. Tesla’s board chair, Robyn Denholm, argues that such a plan is necessary to “retain and incentivize” Musk, helping the company reach goals that may seem “unrealistic” at first glance.
• “Unthinkable amount.” Dan Coatsworth, an investment analyst at AJ Bell, calls the amount “unthinkable.” He stresses that Musk, whose reputation has been damaged by his political activity, is leading a company that is losing ground in the market.
• Falling sales. Tesla’s latest financial report shows the sharpest sales decline in the past 10 years, making it extremely difficult to achieve the outlined goals.
• Questions for management. Coatsworth also questions why the board is fighting to keep Musk, while Musk himself should be proving his effectiveness. Previously, there were rumors that Tesla’s leadership considered removing him due to his political activity and the sharp drop in the company’s stock price.
This proposal has become part of ongoing debates about Musk’s future at Tesla and his influence on the company. In August, Musk already received Tesla shares worth $29 billion, making him the richest person in the world. However, in 2023, a U.S. court ruled that an earlier $50 billion compensation plan proposed by the board for Musk was “unfair” to investors.
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