Tesla proposes package for Musk that could top $1 trillion

Core Viewpoint - Tesla has proposed a compensation package for CEO Elon Musk that could exceed $1 trillion if he meets ambitious growth targets, linking his pay to long-term shareholder performance [1][3][6]. Group 1: Compensation Package Details - The proposed plan could grant Musk up to 12% of additional total company shares, contingent on Tesla achieving a market capitalization of at least $8.5 trillion by 2035 [2][10]. - To receive the full compensation, Musk must meet 12 specific milestones related to market capitalization, starting with a $2 trillion market value and increasing by $500 billion increments [9][10]. - The package also includes operational goals, such as delivering 20 million Tesla vehicles, and aims to ensure Musk remains with the company for at least 7.5 to 10 years to receive the full award [10][11]. Group 2: Market Context and Reactions - Tesla's current market capitalization is just over $1 trillion, which has decreased from its peak due to recent weak earnings and sales challenges attributed partly to Musk's political affiliations [3][11]. - Following the announcement of the compensation plan, Tesla shares experienced a 2.5% increase, indicating positive investor sentiment towards the alignment of Musk's pay with shareholder interests [3][12]. - Analysts expect the shareholder vote on the proposal in November to pass, as investors appreciate the performance-based structure of the compensation [11]. Group 3: Public Perception and Challenges - Despite the ambitious compensation plan, there are concerns about potential public backlash against Musk and Tesla, especially given Musk's low favorability ratings in recent polls [7][8]. - The company is currently contesting a Delaware court ruling that invalidated a previous $55.8 billion compensation package for Musk, highlighting ongoing legal and reputational challenges [4][11].