Elon Musk could receive up to $1 trillion under proposed 10-year Tesla pay package
Board seeks shareholder approval for a plan tying compensation to long-term company targets as litigation over a prior award continues
Elon Musk could receive as much as $1 trillion if Tesla meets a series of steep performance targets under a newly proposed 10-year pay package, the company said, a sum that would eclipse any corporate compensation award in history.
The board has circulated terms that would link awards to long-term milestones intended to drive shareholder value, and is preparing to seek shareholder approval. Tesla said the plan is designed to align rewards for the chief executive with the company’s long-term performance and to encourage sustained leadership over the next decade.
Tesla chairman Robyn Denholm wrote to investors saying the package is “designed to align extraordinary long-term shareholder value with incentives that will drive peak performance from our visionary leader.” Denholm added that, should Musk achieve all performance milestones, “his leadership will propel Tesla to become the most valuable company in history.”
The proposal follows a contentious legal history over executive pay at the electric-vehicle maker. A 2018 compensation plan for Musk that was previously valued at roughly $56 billion was challenged in court; parts of that award were struck down and appeals are still pending. The new proposal comes amid efforts by the board to keep Musk focused on Tesla as he remains involved in other companies and political activity.
Tesla has not publicly outlined each specific metric in detail in the documents shared with investors, but the company indicated the awards would be contingent on long-range performance goals tied to shareholder value. Company officials and the board have framed the package as an incentive structure meant to secure leadership continuity and to push for ambitious growth over a decade-long horizon.
Analysts and investors have in recent years raised questions about management focus as Musk expands his roles at other ventures. The board’s push for a binding, long-term compensation arrangement appears aimed at ensuring that Tesla’s chief executive remains committed to the automaker’s strategic objectives despite his broader business and public engagements.
If approved by shareholders, the package would mark an unprecedented level of executive compensation tied to corporate milestones. Tesla said it will continue to communicate with investors and intends to file the necessary materials in advance of a vote.
The company is appealing the earlier court decision related to the 2018 award. Any final resolution of that litigation could affect how investors and regulators view subsequent compensation proposals, and may influence shareholder sentiment ahead of a vote on the new plan.