🔗 Share this article

Investors in the electric car maker assembled this Thursday to vote on a massive remuneration plan for CEO Elon Musk worth approximately close to $1 trillion. Upon approval, this plan would demonstrate investor confidence that the billionaire can steer the vehicle manufacturer into an period shaped by artificial intelligence and advanced machinery. If denied, Tesla could confront the departure of a visionary leader who historically built the brand synonymous with EVs.

Historic Goals and Market Capitalization

Should Musk achieve the ambitious targets detailed in the compensation plan introduced at Tesla's shareholder gathering, he could become the pioneering trillionaire. To reach this goal, he must steer Tesla to a staggering $8.5 trillion in market capitalization, which is an eightfold increase its existing market cap. Furthermore, he will be obligated to launch numerous autonomous vehicles and advanced androids, while upholding the company's bottom line in the massive revenue figures in the upcoming decade.

Reward System

The primary objectives of the remuneration structure, split into twelve stages, outline a path for Tesla to achieve its enormous valuation. Upon achievement, Musk would be in a position to cash in an further 12% of the company's stock. To qualify, he must stay committed with the company for no less than 7.5 years. Additionally, he must contribute to forming a future leadership strategy for the business he has led for in excess of 20 years. The equity incentives provided by the new compensation plan, combined with shares assured in his previous compensation plan, would result in Musk with 25 percent equity of Tesla's shares. By the start of November, Tesla equity was priced approaching its yearly maximum, at around $450 per share.

Ambitious Targets

Over the course of a ten-year period, Musk will be tasked to produce 20 million electric vehicles to consumers, distribute 10 million live FSD memberships, develop and sell 1 million advanced androids, and introduce 1 million robotaxis in paid operations.

Musk will also be tasked to bring the firm to $400 billion in real profits for a full year. Tesla's tangible revenue for the July-September 2025 were $4.2 billion, 9 percent lower from the same period last year.

As of November, Musk's personal wealth was estimated at $460 billion, the leading in the world, based on financial data.

Restoring a Invalidated Plan

Investors are also considering a proposal that would remunerate Musk after his earlier remuneration deal was invalidated by a judicial body in Delaware. The compensation package, estimated to be $56 billion, was disputed by a individual investor who won his case. The Delaware court of chancery dismissed Musk's pay package twice. Should investors pass the arrangement in Thursday's vote, Musk is set to be granted the huge sum regardless of if Tesla and Musk overturn the ruling of the lawsuit.

Following Musk's earlier remuneration deal was originally overturned, he relocated Tesla's legal headquarters out of Delaware and into Texas. He did the same with SpaceX and other business entities. In the previous year, according to Texas regulations, shareholders again approved the pay package.

But Delaware's often referred to as "equity court" again rejected one of the biggest CEO compensation packages in recent times. Following that negative decision, Musk took to social media to voice displeasure with the jurisdiction and its "prominent judicial figure", perhaps sparking a number of company relocations that Delaware legislators have tried to stop with new laws.

In considering whether Musk had improper sway in being granted that 2018 pay package, a prominent legal scholar observed that the court recognized that other "superstar CEOs" like Facebook's founder and the Amazon founder were not granted this kind of goal-oriented agreements.