Tesla board to propose potential $1 trillion pay package for Elon Musk
Reported ten-year equity plan would pay out in shares if performance milestones are met; follows court rejection of an earlier award
Tesla is preparing to offer Chief Executive Elon Musk a proposed ten-year compensation package that could be worth $1 trillion if the company meets a series of performance targets, the Daily Mail reported Friday.
The package, described by the report as the largest in corporate history, would be settled in Tesla shares rather than cash or traditional bonuses and is structured so that payouts would occur only as specific operational and market-value milestones are achieved. The $1 trillion figure was reported as roughly equivalent to £740 billion.
According to the report, the board’s proposal follows a US court decision that struck down a prior award to Mr. Musk worth close to £40 billion. Tesla is appealing that ruling, and the new plan is intended to create fresh incentives tied to company performance over the next decade.
Tesla Chair Robyn Denholm told investors in a letter cited by the report that the board believes the structure will align Mr. Musk’s interests with those of shareholders. "If Elon achieves all the performance milestones, his leadership will propel Tesla to become the most valuable company in history," Denholm wrote, according to the Daily Mail.
The board has framed the proposal as a tool to bolster executive focus on Tesla’s operations amid concerns that the chief executive’s attention has been divided by other business activities and political engagement. The report said the pay package is designed to be paid in stock, not cash, and contingent on clearly defined milestones over the ten-year period.
The development comes as Tesla continues to navigate legal and governance scrutiny over executive compensation. The earlier award that a US court invalidated was the subject of litigation that questioned whether its size and terms were appropriate. Tesla is pursuing an appeal of that decision, and the company has not publicly confirmed details of a new compensation plan as of the report.
If adopted and if all performance targets were met, the proposed plan would eclipse conventional executive pay packages by a wide margin and rank among the largest potential awards ever reported for a corporate chief executive. Proposals that tie equity grants to long-term performance milestones are common in large public companies as boards seek to align management incentives with shareholder returns, but the scale reported in this case would be extraordinary.
The Daily Mail report provided the figures and the investor letter excerpt. Tesla and Mr. Musk did not immediately provide public comments responding to the report. The company has previously defended performance-based equity awards as aligning executive rewards with company value creation.
Any formal proposal would typically require board approval and, depending on the company’s governance structure and plan design, could also require shareholder approval and regulatory disclosure. Legal proceedings over the earlier award are expected to continue as Tesla pursues its appeal.