Elon Musk stands on the brink of becoming the world’s first trillionaire following today’s approval by Tesla shareholders. The company has greenlit a new compensation plan for its CEO that could unlock $1 trillion in Tesla stock if specific benchmarks are met over the next ten years.
For Musk to attain trillionaire status, Tesla’s overall stock value must surge from its current $1.5 trillion to over $8.5 trillion. This plan also entails that Musk will forgo a traditional salary. To secure an additional 12% of the company’s stocks by 2035, Musk must deliver on ambitious targets, including selling 20 million electric vehicles, acquiring 10 million active full self-driving subscriptions, producing one million humanoid robots, and launching a commercial service for one million Tesla taxis.
Even if Musk falls short of the primary objectives, the package could still yield significant rewards. For instance, achieving an 80% increase in the company’s market value, doubling vehicle sales, and tripling operating earnings, or meeting any two of a dozen operational goals could earn Musk $50 billion in additional Tesla shares.
Currently the wealthiest individual globally with a net worth of $493 billion, according to Forbes, Musk emphasizes that his pursuit is not solely about financial gain but about increasing his Tesla stake to around 30% to retain control over the company. He underscores the importance of this control in light of Tesla’s envisioned “robot army,” alluding to the Optimus humanoid workers that he feels only he should oversee.
While many investors have voiced support for the compensation plan, including Baron Capital Management, critics such as the US public pension fund Calpers and Norway’s sovereign wealth fund have raised concerns about the excessive nature of the pay structure. The Norway fund, in particular, has pointed out issues regarding the independence of the board that devised the plan, which includes Musk’s brother.
This critique echoes a previous incident nearly two years ago when a Delaware court criticized the approval process for an earlier Musk pay package as “deeply flawed,” citing his “extensive ties” to board members.
