Quick overview

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Tesla offered Elon Musk a groundbreaking compensation package that could be worth up to $1 trillion, a first in corporate America. Musk must meet several demanding requirements to receive the full payout, including expanding Tesla’s emerging robotaxi business and boosting the company’s market value from the current $11 trillion to at least $81 trillion. The long-awaited proposal aims to motivate Musk to lead Tesla for years to come.

The plan spans ten years. According to Tesla’s proxy filing on Friday, Musk could acquire an additional 25 percent of the company’s shares. Musk has clearly stated that he desires a stake of that size.

The plan provides Musk, the world’s richest man, with a financial windfall and greater control over the company after a Delaware court invalidated his 2018 package worth over $50 billion.

The board is exploring alternative ways to compensate its CEO while Tesla challenges that ruling, including giving Musk an interim stock award in early August worth approximately $30 billion.
Musk emphasized that he needs to hold at least a 25 percent voting stake in the company—a concern he raised on X last year—and expects full compensation for his previous services during upcoming meetings discussing his package.

The filing also indicates Musk hinted that if these guarantees were not met, he might leave Tesla to pursue other interests. The committee concluded that Musk’s concerns appeared genuine after further discussions and testing these positions during negotiations.

The talks heated up after a Delaware court invalidated Musk’s 2018 compensation package.

Musk was also a member of President Donald Trump’s Department of Government Efficiency team as his business endeavors outside of Tesla, such as xAI, Neuralink, and SpaceX, continued to garner increasing valuations. Musk’s political actions, which investors believed were harming Tesla’s reputation, were obviously a major concern for the committee as well.

The document states that it aimed to “get guarantees that Musk’s engagement with the political arena would conclude in a timely fashion.”. Additionally, it expressed concern that “the race to secure top AI talent, including through nine-figure compensation packages,” could cost Tesla Musk and other AI-focused staff members who would leave with their CEO.