How Tesla shareholders could make Elon Musk the world's first trillionaire

Core Viewpoint - The approval of Elon Musk's proposed compensation plan at Tesla's upcoming shareholders meeting could significantly impact the company's future valuation and Musk's personal wealth, potentially making him the world's first trillionaire if Tesla's market cap reaches over $8 trillion in the next decade [1][2]. Compensation Plan Details - The proposed 2025 CEO Performance Award includes performance milestones that could lead to Tesla becoming the most valuable company in history if achieved [2]. - Musk's compensation could total $1 trillion, with shareholders also considering an alternative payment method for the estimated $56 billion owed from a previous compensation plan [3]. - The 2025 package consists of a dozen milestones, starting with a market cap of $2 trillion and requiring an additional $500 billion growth for each subsequent tranche until reaching $8.5 trillion by 2035 [4]. Performance Requirements - To earn additional stock, Musk must deliver 20 million electric vehicles, 10 million active full self-driving subscriptions, 1 million humanoid robots, and 1 million robo-taxis, along with achieving $400 billion in actual earnings for four consecutive quarters [5]. - The current market capitalization of Tesla is approximately $1 trillion, and Musk must remain vested in the company for at least seven and a half years while developing a long-term succession plan [6]. Challenges and Support - The milestones set for Musk are described as extraordinarily difficult, and achieving them would position Tesla's value close to the combined worth of Meta, Microsoft, and Alphabet [7]. - Tesla's Board Chair has indicated that a rejection of the compensation plan could result in losing Musk as CEO, emphasizing the importance of the vote [8]. Shareholder Voting Dynamics - Recent SEC filings indicated a shift in voting intentions among major investment funds regarding the compensation package, with some initially planning to vote against it but later changing their stance [12]. - Norges Bank Investment Management, Tesla's seventh-largest shareholder, announced its intention to vote against the proposed pay package due to concerns over its size and potential dilution [13][14]. - Musk, as the largest individual stockholder, has the ability to influence the vote in favor of his compensation package, raising questions about accountability [15]. Historical Context - Tesla has a history of incentive-based compensation plans, but the previous 2018 package was invalidated by a Delaware court, leading to ongoing legal battles and prompting Musk to advocate for relocating Tesla's corporate home to Texas [16][17]. - The trend of companies moving away from Delaware, influenced by Musk's actions, has been noted as a significant shift in corporate law dynamics [18].