Elon Musk, the world’s richest man, could move closer to becoming the first trillionaire. Tesla’s board introduced a new pay package designed to secure his attention on the electric carmaker during turbulent times.
The plan grants Musk massive stock awards if Tesla achieves record-breaking growth in market value. His earlier agreement looked impossible at first but Tesla hit its goals faster than expected.
The trillion-dollar pathway
The deal could hand Musk 423.7 million Tesla shares, worth $143.5 billion today. But the reward depends on Tesla’s performance.
The company must climb to $8.5 trillion in market capitalization for Musk to claim the full amount. That figure dwarfs today’s $1.1 trillion. At that level, Musk’s additional shares would be valued near $1 trillion.
Such growth would crown Tesla the most valuable firm ever, overtaking Nvidia’s lead. Despite Toyota’s larger sales and profits, Tesla already holds the top spot in automotive valuation.
Tesla may link to Musk’s AI venture
The same proxy filing included a proposal for Tesla to invest in xAI, Musk’s artificial intelligence company. The idea could further tie Tesla to Musk’s growing empire.
XAI recently bought X, the platform Musk acquired in 2022 for $44 billion. Tesla gave no stance or details on how much it might invest.
Any deal would increase Tesla’s exposure to Musk’s private business and could boost his fortune.
Musk’s empire of wealth
Musk owns 410 million Tesla shares worth $139 billion. Alongside his stakes in xAI, SpaceX, and other ventures, Bloomberg values him at $378 billion.
He also holds rights to 304 million more shares from a disputed 2018 deal. Delaware courts struck that down, though Tesla is pushing to reinstate it this year. Including those options, he controls about 18% of Tesla.
Tesla’s shares nearly doubled after the 2024 election on optimism around Musk’s political ties. But backlash, sales declines, and shrinking profits erased those gains. Shares remain 26% down from the December high.
Robotaxis and humanoids on the horizon
Musk continues to predict a surge in Tesla’s growth. He points to driverless robotaxis as a major profit source. Owners could rent out cars for autonomous rides when unused.
He also promises humanoid robots that could someday outsell Tesla’s vehicles.
Analysts rally behind Musk
“It’s a massive package but Tesla must retain Musk as CEO,” said Wedbush analyst Dan Ives. He argued Musk drives Tesla’s AI growth potential.
The board echoed this, noting Musk had hinted at pursuing other interests without new guarantees. It stressed his leadership as unmatched.
Still, Tesla acknowledged succession planning. Musk must prepare a CEO transition framework to unlock the final 70 million shares.
A focus on leadership continuity
Tesla said it regularly reviews succession for emergencies and long-term needs. It highlighted a strong internal talent pool and external options.
Musk earns no salary. His pay comes only from stock and options, leaving him unpaid since 2017 due to legal disputes. By contrast, Jeff Bezos and Mark Zuckerberg relied solely on their founding stakes without extra grants.
Musk pushes for voting power
Musk insists he needs 25% control of Tesla to steer its future in AI and robotics. Without it, he warned he may pursue ventures outside the company.
Ross Gerber of Gerber Kawasaki argued Musk fears losing control. He called the package rooted in greed but admitted it might be justified if Musk meets the targets.
Grand ambitions face hard realities
If Tesla hits $8.5 trillion, Musk’s holdings could rise by nearly $1 trillion. But he gets nothing until Tesla doubles to $2 trillion and meets operational goals. These include one million robots or $50 billion in adjusted operating income, far above Tesla’s best year.
Skeptics doubt the promises. Musk has touted fully autonomous cars since 2014 without results. Analyst Gordon Johnson accused him of inflating Tesla’s stock through bold claims.
Critics warn the package encourages showy goals rather than fixing Tesla’s EV struggles. Chinese rival BYD is set to surpass Tesla in sales.
At the same time, changes in US rules eliminated Tesla’s lucrative revenue from regulatory credits, increasing pressure on its core business.
Johnson dismissed the pay plan’s lofty projections. “Tesla will never hit $8 trillion,” he said.
Tesla shares gained about 5% in early trading after the announcement.
