Elon Musk to be world's first trillionaire with new compensation package?

Tesla has proposed a $1-trillion performance award for Elon Musk, granting him 12% of shares if the company's market cap hits $8.5 trillion and key milestones are met

Tesla has proposed a new performance-linked award for chief executive officer (CEO) Elon Musk that could be worth about $1 trillion, contingent on the company meeting a series of demanding milestones.

 

The package, disclosed in a preliminary proxy statement filed on Friday, would grant Musk around 12 per cent of Tesla shares if its market capitalisation rises from about $1 trillion to $8.5 trillion over the next decade.

 

No salary or cash bonus during award period

According to the proposal, Musk will receive no salary or cash bonus during this period. “To be exact, he must create nearly $7.5 trillion in value for shareholders for him to receive the full award,” the filing said.

 

Musk, already the world’s richest person, currently holds about 13 per cent of Tesla stock and has repeatedly sought a larger stake in the electric vehicle manufacturer.

 

Mirrors framework of Musk’s 2018 award 

“The 2025 CEO Performance Award similarly challenges Elon to again meet a series of even more aspirational goals … all while growing the company’s market capitalisation by trillions of dollars,” the filing added.

 

The proposal mirrors Musk’s 2018 award, which was tied to $600 billion of market value creation. Under the new package, Musk must also drive operational milestones, including “one million robotaxis in commercial operation and delivery of one million artificial intelligence (AI) bots”.

 

Follows interim stock grant worth $29 billion 

The compensation proposal comes a month after Tesla approved the grant of 96 million shares, valued at about $29 billion, as part of an interim stock award to Musk. The company said the shares will vest two years from the grant date, provided Musk remains in continuous service as CEO or in an approved senior executive role at Tesla.