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Elon Musk's $1 trillion Tesla pay package: Here are the major caveats
Fastcompanyยท 2025-09-05 18:17
Core Viewpoint - Tesla has proposed a compensation package for CEO Elon Musk that could amount to nearly $1 trillion, contingent on achieving significant milestones over the next decade, potentially making him the world's first trillionaire [2][4][11]. Group 1: Compensation Proposal Details - The proposed compensation package is the largest in history and would grant Musk nearly $975 billion worth of shares if Tesla meets ambitious performance targets [4][7]. - The compensation consists of 12 tranches of shares, with Musk receiving equity based on achieving specific operational and market cap milestones [9][8]. - To receive the full compensation, Tesla must reach a market capitalization of $8.5 trillion, which would require the company to more than double the current market cap of Nvidia, the most valuable company to date [11][13]. Group 2: Milestones and Conditions - Key milestones include delivering 20 million Tesla vehicles, achieving 10 million active Full Self-Driving (FSD) subscriptions, and delivering 1 million robots and 1 million Robotaxis in commercial operation [15]. - The first milestone requires Tesla to reach a market cap of $2 trillion, nearly doubling from its current valuation of approximately $1.1 trillion [10][11]. - The proposal is subject to shareholder approval, with a vote scheduled for November 6 [16]. Group 3: Market Context - Tesla's stock price has seen a decline of over 12% year-to-date, remaining below its peak of $488 in December 2024, despite a recent increase of around 3.9% following the announcement of the compensation proposal [17][16]. - The current stock price is approximately $352 per share, indicating significant growth is needed to meet the proposed market cap milestones [10][16].