Elon Musk is on track to potentially become the first trillionaire globally following Tesla shareholders’ recent approval. The company has greenlit a new compensation plan for its CEO, which could unlock $1 trillion in Tesla stock for Musk if certain benchmarks are met over the next decade.
For Musk to achieve trillionaire status, Tesla’s current stock value of approximately $1.5 trillion must surge to over $8.5 trillion. The agreement also stipulates that Musk will not receive a salary.
To secure an additional 12% of Tesla’s stocks by 2035, Musk must achieve various goals, including delivering 20 million electric vehicles, attaining 10 million active full self-driving subscriptions, introducing one million humanoid robots, and launching a commercial fleet of one million Tesla taxis.
Even if Musk falls short of the major objectives, the plan could still yield substantial returns. For instance, he stands to receive $50 billion in extra Tesla shares if he boosts the company’s market value by 80%, as he did in the previous year, along with doubling vehicle sales and tripling operating earnings, or meeting any other two out of twelve operational targets.
Currently ranked as the wealthiest individual globally with a net worth of $493 billion by Forbes magazine, Musk emphasizes that his focus is not solely on monetary gain but on increasing his ownership stake in Tesla to almost 30%, enabling him to retain control of the company. This move is particularly crucial to Musk due to his concerns about Tesla’s future “robot army,” referring to the Optimus humanoid workers that he insists on overseeing himself.
While many investors, such as Baron Capital Management, support the compensation package, critics like Calpers and Norway’s sovereign wealth fund have raised objections, citing concerns over excessive pay. The Norway fund, in particular, questions the independence of the board responsible for designing the package, which includes Musk’s brother. This scrutiny echoes a previous court ruling in Delaware, which criticized the approval process of a past Musk pay plan as “deeply flawed” due to his close ties with directors.
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