All or nothing
Why it matters: Tesla is proposing a colossal $1 trillion pay package to lock in CEO Elon Musk for the next decade, tying his compensation to a series of audacious growth targets that would make Tesla the most valuable company in history. If he fails to significantly grow the company, he gets nothing.
By the numbers: The plan is designed to be extremely challenging. To get the maximum payout of 423 million shares, Musk must hit these top-end goals:
📈 Market Cap: Grow Tesla from $1.09 trillion today to $8.5 trillion — more than double the current value of Nvidia, the world's most valuable company.
🚗 Vehicle Sales: Sell 12 million more electric vehicles. The company has only sold 8 million to date.
🤖 New Ventures: Sell 1 million AI robots and operate 1 million cars in its Robotaxi network. Currently, sales for both are zero.
💰 Earnings: Increase adjusted earnings 24-fold to $400 billion. Last year's earnings were $16.6 billion.
📉 The Catch: If Musk fails to at least double Tesla's valuation to $2 trillion over the 10-year period, he will receive nothing.
How it works: The "all-or-nothing" style plan means Musk gets no salary or bonus.
The payout is unlocked in 12 tranches, each worth 1% of Tesla stock.
Each tranche requires hitting a market cap target plus a corresponding operational goal.
Once achieved, the milestones must be sustained for six months to secure the shares' voting rights.
Musk cannot sell the stock for seven-and-a-half years.
The big picture: This proposal comes after Musk repeatedly suggested he might reduce his commitment or even leave Tesla if not given greater voting rights.
The structure echoes his 2018 pay deal, which was worth $56 billion but was struck down by a Delaware judge last year.
In response, Tesla has moved its incorporation to Texas and is appealing the decision.
If the new package is approved and the old one is reinstated on appeal, Musk's voting control could rise to about 25 percent after taxes and dilution.
What they're saying: "Retaining and incentivising Elon is fundamental to Tesla... becoming the most valuable company in history." — Robyn Denholm, Tesla Chair
What's next: Shareholders will vote on the massive package at the company's November 6 annual meeting.
Under Texas law, Musk and his brother Kimbal, who is on the board, are permitted to vote on the matter.