Tesla unveiled a new compensation plan for CEO Elon Musk, the potential value of which could reach $1 trillion — an unprecedented figure for corporate America, reports Bloomberg.
The proposed 10-year program includes ambitious goals, including growing the robotaxi business and increasing Tesla’s market capitalization from the current level of $1 trillion to $8.5 trillion. Under the package, Musk will be able to increase his stake in the company to 25%, which he has long sought. If all indicators are met, the value of the award will increase from $87.8 billion to $1 trillion.
In addition to financial incentives, the plan involves Musk’s involvement in the development of a mechanism for the long-term succession of the company’s leadership. Investors see the new deal as a way to focus Musk’s attention on Tesla, which is developing new areas including robotics and artificial intelligence. The report also includes a shareholder proposal for Tesla’s possible investment in Musk’s startup xAI.
Amid the news, the company’s shares rose 2% in New York, although they have lost 16% since the beginning of the year. Previously, Musk’s 2018 compensation package, valued at more than $50 billion, was overturned by a Delaware court. At the time of cancellation in January 2024, the package of options was valued at $56 billion, and after a 44% increase in Tesla shares this year, its value exceeded $100 billion.
While Tesla appeals the decision, the board of directors is trying to retain Musk with new compensation schemes, including an interim stock package worth $30 billion. Despite criticism due to Musk’s numerous parallel projects and his political activism, the board of directors shows a willingness to continue to bet on his leadership. Musk himself said in May that he plans to remain at the head of the company for at least another five years.
