Tesla Inc (NASDAQ:TSLA) has proposed a historic compensation plan for its CEO Elon Musk that could be worth approximately $1 trillion if he meets performance targets over the next decade.
The package, which shareholders will vote on in November, includes 12 tranches of stock awards Musk will receive only if Tesla hits extraordinary milestones.
These include reaching a market capitalization of $8.5 trillion, roughly eight times its current valuation, as well as massive gains in profitability, vehicle production, and new business lines in artificial intelligence and robotics.
Musk must remain with Tesla for at least a decade to unlock the awards.
If successful, the plan would grant him more than 423 million additional shares, boosting his ownership from about 13% to nearly 29% and significantly increasing his voting power.
He would not receive any salary or cash bonuses; all compensation is equity-based.
Wedbush analysts noted that the package mirrors Tesla’s 2018 CEO performance award but raises the bar even higher.
“In the proxy just filed Tesla’s board members have asked shareholders to approve a long-term incentive package for Musk to retain and motivate the CEO to remain in his current leadership role with a new share package where he will only be paid if he attains ‘extraordinary financial returns,’” they wrote.
The award includes operational hurdles such as 20 million annual vehicle deliveries, 10 million active FSD subscriptions, and deploying 1 million Optimus robots and 1 million robotaxis.
“This new performance award challenges Musk to reach an even higher bar across multiple aspects of the business,” the analysts wrote, adding that aggressive Adjusted EBITDA goals, from $50 billion to $400 billion over four consecutive quarters, are also embedded.
Tesla’s board argues Musk’s leadership is essential at what it calls “the most critical time in the company’s history.”
The plan also ties to a proposed strategic investment in Musk’s xAI venture, designed to bolster Tesla’s AI capabilities.
Wedbush’s analysts echoed that sentiment. “We believe this was the smart move by the Board as the biggest asset for Tesla is Musk... and with the AI Revolution this is a crucial time for Tesla ahead with autonomous and robotics front and center,” they wrote.
If all targets are achieved, the package could make Musk the world’s first trillionaire, cementing both his financial and strategic influence over Tesla as the company expands deeper into AI and robotics.
Wedbush maintained its “Outperform” rating and a $500 price target on Tesla, calling the package “a critical next step to keep Musk as CEO at least until 2030.”
Tesla shares traded up 2.5% $347 on Friday morning.