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Tesla Proposes Billion-Dollar Pay Package for Elon Musk: The Future of Leadership

9/5/2025
Tesla's board proposes a staggering pay package for CEO Elon Musk, potentially worth $1 trillion. This move aims to incentivize Musk during a crucial phase for the electric car giant as it strives for ambitious growth targets.
Tesla Proposes Billion-Dollar Pay Package for Elon Musk: The Future of Leadership
Tesla's board seeks shareholder approval for a $1 trillion pay package for Elon Musk, aiming to secure his leadership during critical growth phases.

Tesla's Board Proposes Groundbreaking Pay Package for Elon Musk

Tesla's board of directors is urging shareholders to approve a monumental new pay package for CEO Elon Musk, which could be valued at a staggering $1 trillion over the next decade. This proposed compensation package represents one of the most lucrative in corporate history, as outlined in a recent regulatory filing released on Friday.

Details of the Compensation Package

The electric vehicle manufacturer plans to grant Musk approximately 423 million shares. Currently, these shares are valued at around $143 billion. However, Musk would only earn this substantial pay if Tesla meets specific profitability, production, and market capitalization benchmarks. The board emphasized the necessity of a long-term performance award to keep Musk focused on Tesla during this critical juncture in the company's evolution.

Market Cap and Operational Milestones

For Musk to access the full value of this pay package, Tesla must achieve a market capitalization of $8.5 trillion — a figure that is approximately eight times its present value — within the next 10 years. At that market cap, the stock granted to Musk would surpass $1 trillion in worth. Additionally, the company must hit crucial operational targets, including:

Delivering 20 million vehicles Producing 1 million self-driving robotaxis Manufacturing 1 million humanoid robots, named Optimus, which are currently under development

Under the proposed compensation plan, Musk would also gain more voting power in Tesla, further solidifying his influence in the company.

Importance of the Compensation Scheme

This new compensation strategy is deemed vital for retaining Musk as CEO at least until 2030. As noted by Wedbush analyst Dan Ives, Tesla is entering a pivotal phase in its growth cycle, particularly with advancements in autonomous technology and robotics on the horizon.

Previous Legal Challenges and Current Performance

Elon Musk's past compensation has not been without controversy. In 2018, Tesla investors initiated a lawsuit against Musk, contesting his $56 billion pay package and alleging breaches of fiduciary duties by him and the board. A Delaware court ruling in December ordered the revocation of this award. Most recently, in August, Tesla announced a grant of shares to Musk worth around $29 billion.

Despite these developments, Tesla's vehicle sales have faced challenges, experiencing a 1% decline in 2024, marking the company's first annual sales drop in 12 years. This decline is attributed to increasing competition from rival automakers and customer dissatisfaction stemming from Musk's political affiliations. In the latest quarterly report, Tesla revealed a significant drop in profits, plummeting from nearly $1.4 billion to $409 million, along with a decrease in revenue.

While Tesla's stock price has struggled in 2025, it has rebounded impressively, showing an increase of over 54% in the past year and about 143% over the last five years.

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