(Bloomberg) – Tesla Inc. proposed a new compensation agreement for CEO Elon Musk, potentially valued at about $ 1 trillion, a huge and unprecedented package in the American corporate world.
The long -awaited proposal, designed to encourage Musk to lead Tesla in the coming years, sets out a series of ambitious goals that he must meet to receive full payment, including the expansion of Tesla’s robotaxis business and increasing the company’s market value to at least $ 8.5 trillion, compared to about $ 1 trillion. The plan lasts 10 years.
The additional actions that Musk could receive would raise their participation in the electric vehicle manufacturer to at least 25%, according to the detailed terms in the Tesla power of attorney presented on Friday. Musk publicly stated that he wants a participation of this size.
The plan offers Musk, the richest person in the world, an unexpected financial opportunity and the expansion of company control after its 2018 package, valued at over $ 50 billion, has been rejected by a Delaware Court. While Tesla appeals from the decision, the board seeks other ways to compensate for its CEO, including a provisional action concession in early August, valued at about $ 30 billion.
The new plan’s incentives aim to keep Musk’s focus on Tesla while the company seeks growth in new markets such as robotics and artificial intelligence. The document presented on Friday also included a non-binding proposal from shareholders to make Tesla a participation in Musk’s startup Xai, an idea that Musk had already discussed before.
The new agreement highlights Musk’s dominion over the automaker, despite the numerous demands of his time. Musk, who has been working as Tesla’s main executive since 2008, supervises four other companies: Spacex, Xai, Neuralk and Boring Co. He told Bloomberg in an interview in May that he is committed to staying in Tesla in five years.
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Tesla’s shares rose 2% until 6:30 am on Friday morning in New York. The shares fell 16% this year.
A $ 8.5 trillion market capitalization would be more than double Nvidia Corp., currently the most valuable company in the world. The value of Tesla hit the peak at the end of 2024, by about $ 1.5 trillion.
The value of the latest prize for CEO, $ 87.8 billion in the document, would increase to about $ 1 trillion if Musk reaches all performance goals and receive all restricted actions. The power of attorney also describes that Musk should participate in the council’s development of a CEO long -term succession structure to receive any of the last two installments of the performance award.
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“Simply put, retaining, and encouraging Elon is critical for Tesla to achieve these goals and become the most valuable company in history,” Tesla told President Robyn Deholm and director Kathleen Wilson-Thompson.
Priorities
Musk, 54, had already urged the Council to arrange a new remuneration package for him, suggesting that he would seek artificial and robotic intelligence products in other areas if he had not about 25% of Tesla’s stock control. Although Musk remains Tesla’s largest shareholder, he sold a significant portion of his actions to finance Twitter acquisition. The social media platform, which he renamed X, was acquired by Musk’s Xai earlier this year.
Tesla’s advice continues with Musk, despite its conflicting priorities. In addition to supervising other companies, your attention has become increasingly turned to politics.
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He was President Donald Trump’s greatest funder in last year’s election and briefly led efforts to reformulate the federal government. This triggered a negative reaction against Tesla, which included sporadic cases of criminal fire and vandalism in stores and recharge stations.
The negative reaction contributed to a volatile first semester, with Tesla reporting two of its worst quarters in years and a 13% drop in global vehicle deliveries.
The end of May marked the last official day of Musk as a special government official, and he pledged to spend more time at Tesla. A few days later, he and Trump had a bitter disagreement.
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Tesla has recovered some impetus in recent months, launching its promised autonomous taxi service, which Musk sees as an important part of its future business. The company was launched on June 22 with some robotaxis in Austin.
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