Elon Musk, already sitting atop the global rich list, may be on track to become the world’s first trillionaire after Tesla’s board rolled out an enormous new compensation plan designed to keep him tethered to the electric car giant.
The proposal, disclosed in Tesla’s latest proxy filing, would reward Musk with up to 423.7 million additional Tesla shares if the company reaches unprecedented growth milestones.
At today’s market price, that haul would be worth $143.5 billion—but if Tesla’s valuation hits the board’s long-term target of $8.5 trillion, those shares could ultimately be valued at close to $1 trillion.
Tesla’s current market capitalization sits around $1.1 trillion, making the target more than seven times its present size. If achieved, Tesla would surpass Nvidia, the current market leader, in value, effectively doubling Nvidia’s market cap and cementing itself as the most valuable company in history.
xAI Investment on the Table
Alongside the pay proposal, the proxy also noted a shareholder request that Tesla consider investing in xAI, Musk’s privately held artificial intelligence company.
The filing did not specify what size stake Tesla might purchase, but such a move could further expand Musk’s corporate empire.
xAI itself recently acquired X, the social platform Musk purchased for $44 billion in 2022.
Musk’s Holdings and Legal Battles
Musk currently owns about 410 million Tesla shares, valued at $139 billion as of Thursday’s closing price. He also has options for another 304 million shares, though that 2018 award has twice been struck down in Delaware courts despite shareholder approval. Tesla has been fighting to reinstate the package.
If those disputed options are included, Musk controls roughly 18% of Tesla. The billionaire has openly stated his desire to maintain at least 25% voting power over the company to guide its development in AI and robotics.
“I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control. Enough to be influential, but not so much that I can’t be overturned,” Musk posted on X. “Unless that is the case, I would prefer to build products outside of Tesla.”
Keeping Musk Anchored to Tesla
Analysts say the enormous package underscores Tesla’s need to ensure Musk remains focused on the automaker rather than his numerous ventures.
“It’s a big pay package but Tesla needs to keep its biggest asset in Musk as CEO,” said Dan Ives, analyst at Wedbush Securities. “In this AI era Musk now will drive its next leg of growth. The Board had a $1 trillion dollar decision and made the right one.”
Tesla’s board emphasized in its filing that Musk is uniquely qualified to lead the company. It also revealed that part of the new deal requires Musk to set up a clear succession plan, a framework for CEO transition, before he can claim the final 70 million shares in the package.
Critics Call It Excessive
Not everyone agrees with the plan. Some investors argue it reflects excessive ambition and potential greed.
“This is all about Musk being scared about being kicked out of Tesla because he only owns 13%,” said Ross Gerber, CEO of Gerber Kawasaki and one of Tesla’s early investors.
He added, “If he hits them (the financial and market share targets) then in some ways it (the pay package) is warranted. But I think it goes back to what level of greed can you reach in a modern society that’s enough.”
Skeptics also point to Tesla’s unresolved challenges, including increasing competition from Chinese EV giant BYD, shrinking profits, and the loss of lucrative regulatory credit sales.
“Elon Musk has been saying since 2014 ‘we will have a fully autonomous car next year.’ It hasn’t happened, but that promise has been valued in the billions by Wall Street,” said Gordon Johnson, a frequent Tesla critic. “Elon Musk is a master manipulator. He’s been able to keep the stock elevated. The reason the board is paying him is he’s willing to say things that other CEOs aren’t willing to say or get away with.”
Johnson was blunt about Tesla’s prospects under the new valuation goals: “Things are going to get worse for them, not better. Is Tesla going to go to $8 trillion? Abso-f**king-lutely not.”
Market Reaction
Despite doubts, Tesla’s stock rose about 5% in early trading following the announcement, reflecting renewed optimism among Musk supporters that the company can scale to the lofty heights being promised.