“`html
Tesla has suggested a new $1 trillion remuneration package for chief executive Elon Musk, in what would mark the largest compensation agreement ever provided to a corporate executive.
According to the proposal, Musk would acquire 12 segments of shares over the next ten years if Tesla meets a series of financial, production, and technological benchmarks. If fully realized, the arrangement would elevate Tesla’s valuation from approximately $1 trillion currently to $8.5 trillion, establishing it as the most valuable company globally and contributing nearly $7.5 trillion in shareholder wealth.
The plan additionally specifies that Musk’s engagements in the political domain should “conclude promptly,” reflecting investor worries over his public disputes and a contentious separation with US President Donald Trump.
To unlock the initial portion, Musk would need to nearly double Tesla’s market capitalization to $2 trillion while achieving a cumulative 20 million vehicle deliveries since the launch of Tesla’s first production car.
Further benchmarks include deploying one million Robotaxis, delivering one million AI-driven humanoid robots, and reaching ambitious earnings and product objectives. Accomplishing them all would elevate Musk’s share in Tesla to at least 25% and provide him with enhanced voting power regarding the company’s future.
Tesla chairwoman Robyn Denholm and board member Kathleen Wilson-Thompson conveyed to shareholders that the compensation was crucial for maintaining Musk’s focus on Tesla at a critical juncture in its evolution.
“In simple terms, retaining and motivating Elon is essential for Tesla to reach these targets and becoming the most valuable company in history,” they stated.
Denholm informed CNBC that the agreement was designed to reward outcomes, not mere promises: “If he delivers, if he achieves the extremely ambitious benchmarks laid out in the plan, then he receives equity. It’s 1 percent for every half a trillion dollars of market capitalization, in addition to operational milestones.”
The $1 trillion package surpasses Musk’s previous compensation deals. Earlier this year, Tesla sanctioned a temporary stock award valued at $29 billion to secure his leadership through 2030.
The Delaware Court of Chancery invalidated Musk’s 2018 pay plan, which was then worth up to $56 billion, deeming it excessive and improperly allocated. Musk is appealing, arguing that the court misjudged in revoking a deal that shareholders had approved on two occasions. That package fueled Tesla’s remarkable growth over recent years but became a focal point for corporate governance issues.
Now Tesla’s board is wagering that an even greater, more ambitious award will guarantee Musk directs his efforts toward transforming the company from a manufacturer of electric vehicles into a technology titan focused on AI. Shareholders will cast their votes on the new initiative in the upcoming months.
Source link
“`
