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Investors in the electric car maker gathered this Thursday to decide on a substantial remuneration plan for CEO Elon Musk worth approximately nearly $1 trillion. If approved, this plan would showcase investor confidence that the billionaire can steer the vehicle manufacturer into an period dominated by machine learning and automation. If rejected, Tesla could potentially face the loss of a key figure who once made the brand equivalent with electric vehicles.

Historic Targets and Company Valuation

If the CEO meets the formidable targets outlined in the pay package revealed at Tesla's annual meeting, he could be crowned the world's first trillionaire. To reach this goal, he must lead Tesla to a staggering $8.5 trillion in market capitalization, which is 800% of its existing market cap. Moreover, he will be tasked to deploy numerous driverless automobiles and bipedal machines, while sustaining the company's bottom line in the hundreds of billions over the next decade.

Payment Breakdown

The primary objectives of the compensation plan, divided into 12 tranches, delineate a path for Tesla to reach its enormous worth. Upon achievement, Musk would be eligible to benefit from an additional 12% of the corporation's shares. To be eligible, he must stay committed with the corporation for at least 7.5 years. Furthermore, he is required to contribute to forming a long-term succession plan for the enterprise he has headed for over 20 years. The share grants provided by the new compensation plan, combined with shares promised in his previous compensation plan, would leave Musk with 25% ownership of Tesla's equity. In early November, Tesla equity was priced near its annual peak, at roughly $450 per share.

Formidable Objectives

During a ten years, Musk will be required to manufacture 20 million EVs to customers, market 10 million live FSD memberships, produce and launch 1 million bipedal machines, and deploy 1 million robotaxis in paid operations.

Musk will also be obligated to elevate the company to $400 billion in actual earnings for four straight quarters. Tesla's tangible revenue for the Q3 2025 were $4.2 billion, down 9% from the year before.

By November, Musk's personal wealth was estimated at $460 billion, the leading in the planet, as reported by market tracking.

Reinstating a Revoked Package

Investors are also evaluating a plan that would remunerate Musk after his 2018 compensation plan was invalidated by a legal authority in Delaware. The pay plan, valued at around $56 billion, was challenged by a sole shareholder who succeeded legally. The Delaware judicial system denied Musk's remuneration deal twice. Upon stockholder approval the proposal in Thursday's vote, Musk is set to be awarded the substantial payout whether or not Tesla and Musk succeed in appealing of the legal matter.

Following Musk's 2018 pay package was originally overturned, he moved Tesla's business registration out of Delaware and into Texas. He followed suit with his aerospace company and other companies' headquarters. In the previous year, per Texas statutes, shareholders for a second time approved the compensation plan.

But Delaware's so-called "equity court" again rejected one of the most substantial CEO payouts in modern history. After that unfavorable ruling, Musk used online platforms to voice displeasure with the state and its "activist chief judge", perhaps fueling a series of corporate exits that Delaware lawmakers have attempted to staunch with new laws.

In reviewing whether Musk had undue influence in being given that 2018 pay package, a prominent academic expert observed that the court noted that other "celebrity leaders" like Facebook's founder and the Amazon founder were not granted this sort of goal-oriented agreements.