Elon Musk’s payday could top $1tn with Tesla shares deal
Elon Musk, already the world’s richest man, is at the centre of a corporate controversy after Tesla’s board proposed a $1tn (£820bn) compensation package – the largest in corporate history.
The ten-year plan, designed to incentivise Musk to focus on his EV business, would reward the chief executive with 12 tranches of shares, if Tesla hits a series of staggering targets.
These include raising Tesla’s market value from $1tn to $8.5tn, producing 20 million vehicles, launching a million robotaxis, and delivering one million AI bots.
Critics have slammed the plan as excessive, especially given Musk’s immense personal fortune, currently estimated at $419bn.
Remarkably, even Pope Leo has publicly condemned the potential pay rise, arguing that extreme wealth undermines “the value of human life, of the family, of the value of society”.
Even as Musk faces scrutiny for his political ventures and other business interests, the Tesla board insists that retaining him is “fundamental” for the company’s ambitious growth plans.
Musk doubles down
The proposed pay deal coincided with Musk buying approximately $1bn of Tesla shares via a revocable trust, according to a regulatory filing, sending pre-market stock prices up more than seven per cent.
The purchase ties Musk even more tightly to Tesla’s success and reinforces the board’s message that the chief executive remains committed to the company’s long-term vision.
Robyn Denholm, Tesla’s chairwoman, called Musk a “generational leader”, and defended the plan as essential to keep him “motivated and focused” amid operational and market challenges.
The sheer scale of the package underscores the stakes. To unlock the full award, Musk would need to generate nearly $7.5tn in shareholder value over the next decade – a target that could make Tesla the most valuable company in the world by a wide margin.
Shareholders are expected to vote on the deal later this year, with the first tranche requiring Tesla to reach a $2tn market cap and achieve a cumulative 20 million vehicle milestone.
Tesla’s stock has faced pressure this year, declining two per cent overall compared to the S&P 500’s 12 per cent rise, amid a slump in deliveries and controversies surrounding Musk’s political involvement.
Yet the controversial billionaire remains bullish, continuing to push Tesla’s ambitious AI and robotaxi projects, even as analysts caution that the EV giant could face “a few rough quarters” once US incentives for electric vehicles expire.
Musk’s $1tn potential payday has ignited debates over corporate governance, chief executive compensation, and wealth inequality, raising uncomfortable questions about the balance between shareholder value and executive reward.
While the board and Musk insist the plan will secure Tesla’s future, critics argue it sets a dangerous precedent for excessive executive pay in an era of economic inequality.