Core Viewpoint - Tesla's board approved a $1 trillion pay package for CEO Elon Musk, which is structured around performance milestones that require achieving both valuation and operational goals, raising concerns about the feasibility and implications for shareholders [5][6][18]. Summary by Sections Pay Package Structure - The package includes 12 tiered grants of restricted stock, with market cap triggers starting at $2 trillion and going up to $8.5 trillion, which is 70% higher than Nvidia's recent valuation of $5 trillion [1][6]. - Operational milestones include sales targets for vehicles, humanoid robots, robotaxis, and full self-driving software, alongside Ebitda tiers starting at $50 billion and maxing out at $400 billion [1][5]. Potential Issues with the Plan - The plan has loopholes that could allow Musk to benefit from stock hype without achieving substantial operational progress, raising concerns about the alignment of his incentives with shareholder interests [2][3]. - The operational goals are seen as too easy to achieve, while the higher targets may be overly ambitious, leading to a situation where Musk could still receive significant compensation without delivering real value to shareholders [3][7]. Market and Operational Goals - Achieving the lowest valuation milestone of $2 trillion would require an 85% increase in Tesla's stock price, which is considered unlikely given the current market conditions [8][9]. - The operational target of delivering 20 million vehicles is cumulative and only requires Musk to deliver an additional 12 million vehicles over the next decade, which is viewed as a minimal increase given Tesla's current sales trajectory [13][14]. Shareholder Impact - If Musk achieves the $2 trillion market cap, he could secure his payout regardless of subsequent stock performance, which could lead to a scenario where shareholders see minimal returns while Musk benefits significantly [15][19]. - The potential for Musk to earn nearly $900 million while shareholders experience poor returns highlights a misalignment in the interests of management and investors [18][20].