Tesla Suggests a $1 Trillion Remuneration Plan for Elon Musk
Tesla Unveils Ambitious $1 Trillion Compensation Plan for Elon Musk
Tesla, the electric vehicle pioneer, has proposed a new compensation plan for its CEO, Elon Musk, that could be worth up to $1 trillion. The plan, which is subject to shareholder approval, is designed to push Tesla towards becoming the most valuable company in history.
The proposal, developed by Tesla's Board of Directors, led by Chairwoman Robyn Denholm, is structured into 12 tranches, each worth approximately 1% of the company. To unlock a tranche, Musk must meet both a market cap milestone and a corresponding operational milestone.
If Musk earns all 12 tranches, his stake in Tesla would rise to at least 25%. The first tranche vests at a $2 trillion market cap and 20 million vehicles delivered. The plan also includes delivery of 1 million AI-powered robots and 1 million Robotaxis in commercial operation.
The new plan builds on the framework of Musk's 2018 CEO Performance Award, which is widely regarded as one of the most successful pay plans in corporate history. The goal of the new compensation plan is to maximize long-term shareholder value and keep Musk incentivized to deliver on Tesla's most ambitious targets.
Last month, Musk was granted an interim $29 billion stock package. The compensation package spans 10 years and is tied to both Tesla's market value and operational goals. However, the 2018 award, valued at over $50 billion today, was struck down by a Delaware court and Tesla continues to appeal the ruling.
The new plan includes a 7.5-year holding period on any new shares awarded to Musk. The Board created a special committee that spent seven months evaluating a range of compensation structures before settling on the new plan.
Other operational milestones include 10 million active FSD subscriptions, a significant step towards Tesla's goal of achieving full self-driving capability.
Tesla has produced 8 million vehicles to date, a testament to its rapid growth and market dominance. The new compensation plan reflects Tesla's ambition to continue this trajectory and cement its position as a global leader in the automotive industry.
The proposal will be put to a shareholder vote at Tesla's annual meeting on November 6. The Board of Directors, led by Chairwoman Robyn Denholm, was involved in developing the plan, but no individual shareholders outside the board have been specifically named as developers of the plan.
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