Tesla’s board has proposed a $1 trillion compensation plan for CEO Elon Musk in what would be the largest corporate pay package in history, underscoring the hold Musk has over the carmaker as it attempts to transform into an AI and robotics powerhouse.
The world’s richest person has consistently asked for a bigger stake in the company to gain more control, even as a legal battle over his 2018 pay package – then valued at a mere $56 billion – continues. The newly proposed award is roughly 18 times the size of the contested plan and is close to the company’s current market valuation.
The proposal highlights the board’s confidence in Musk’s ability to steer the company in a new direction while reigniting growth, even as it loses ground to Chinese rivals in key markets amid softening EV demand.
“While bold compensation tied to performance is nothing new, the sheer scale here sets a new bar for CEO incentives and will dominate boardroom debates everywhere,” said Adam Sarhan, chief executive of 50 Park Investments in New York.
The regulatory filing puts Musk on a different plane than other technology executives, saying that “traditional compensation packages granted to executives at other companies were determined to not be appropriate for designing Mr Musk’s incentive compensation.”
Musk transformed Tesla from a niche EV startup into the world’s most valuable automaker, scaling production, expanding globally and pushing the industry toward electric mobility, while running several other companies including SpaceX and xAI.
Tesla’s board says the record award is needed to keep Musk focused and incentivised, but critics argue that, as the company’s largest shareholder, he already has ample motivation and the plan could worsen dilution and pose governance risks.
The board also said the new award could lift his stake significantly if all targets were met, giving him even greater control as Tesla seeks to become the world’s most valuable company.
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