On Friday (5), the Tesla () advice that can make CEO Elon Musk the first trilionaire in the world, as long as he meets a series of extremely ambitious corporate goals.
Musk, who is already the richest person in the world, would have to increase Tesla’s market value eight times in the next decade to receive the total value of the package, according to a document sent to the US Securities Commission.
All remuneration would be in Tesla’s actions. The package, which needs to be approved by the company’s shareholders, must be placed in a vote at the Annual Assembly scheduled for 6 November.
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According to Forbes, dollars. The new compensation could add about 900 billion to this fortune if he can raise Tesla’s market value to $ 8.5 trillion, leaving about 1.1 trillion. It would be, by far, the highest remuneration already pays an executive in corporate history.
To receive any of the shares, Musk would need to stay at Tesla for at least seven and a half years, and ten years to earn the total amount. In addition, it would have to meet several very ambitious operational goals, including supervising the commercial launch of 1 million autonomous taxis and humanoid robots, and increasing profit by over 24 times.
Achieving many of these goals can be extremely difficult. Many other companies around the world are running to improve autonomous cars and robots.
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“Retaining and encouraging Elon is fundamental for Tesla to achieve these goals and become the most valuable company in history,” said Robyn Denholm, President of Tesla, and Kathleen Wilson-Thompson, board of directors, in a letter to shareholders.
The generous remuneration plan will certainly be criticized by some shareholders, who may consider that Musk is being rewarded in excess. Some investors claim that the CEO had a bad performance in recent years and adopted behaviors that have harmed the company. The package will increase the already intense scrutiny over Musk, which is seen as a genius for his followers and a dangerous oligarch for his critics.
Tesla’s sales and profit fell over the past year, while Musk became increasingly involved with right -wing politics. He worked for several months in the Trump administration, which displeased many liberal buyers of electric vehicles.
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Although it has significant control over Tesla, Musk devotes a long time to other businesses, such as Spacex, a rocket company, and Xai, an artificial intelligence initiative that controls the social platform X.
The plan announced on Friday does not impose restrictions on how long it can devote to these other enterprises or their political activities.
The remuneration plan is similar to that of 2018, which granted millions of Tesla to Musk actions if he reached goals that seemed unlikely at the time. He was able to fulfill these goals, but a Delaware judge annulled that package after shareholders claimed that it was excessive and that the company’s advice had not adequately informed the investors. Tesla appealed to the Supreme Court of State.
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The documents presented on Friday include measures that would restore musk remuneration of the 2018 plan if Tesla’s appeal is rejected. With the share price of Thursday, that package would be worth 96 billion dollars.
If shareholders approve of the new package, dissident investors will have a hard time contesting it. This year, Tesla has moved its corporate thirst from Delaware to Texas, where legislation makes it difficult for shareholders with small participation to process companies.
Tesla was a pioneer in the electric car market, but was behind the Chinese Byd and Geely in number of vehicles sold globally, and runs the risk of being exceeded by Volkswagen, according to data from SNE Research, South Korean company.
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Some analysts blame Musk for the fall, saying that he missed resources in the development of the Cybertruck pickup, which sold little, instead of investing in models with broader appeal. Chinese and traditional automakers, such as General Motors and Hyundai, have launched dozens of electric cars that make the main Tesla products, Model 3 sedan and SUV Model Y, seem outdated.
Musk has minimized the importance of car sales, stating that Tesla’s future is in artificial intelligence, autonomous cars and humanoid robots. On Monday (1), the company released its “master plan IV”, which foresees to be in the forefront of an era of “sustainable abundance”, when the energy will come from the sun, people will travel in autonomous cars and robots will take care of the simplest tasks.
“Today we are on the verge of a revolutionary period, ready for unprecedented growth,” says the plan, published on platform X.
In the letter to shareholders, Denholm and Wilson-Thompson stated: “Elon’s singular view is vital to navigating this critical point of inflection.”
But they also indicated a future without Musk, saying that he will work with the board in the “elaboration of a plan for the succession of the CEO in the long run.”
According to the remuneration plan, Musk could receive 35 million shares if Tesla’s market value reaches $ 2 trillion. It will receive additional shares as the company amount rose until it reaches $ 8.5 trillion. The plan is structured for Musk to Lucre with the appreciation of actions only from about $ 335 per share.
To receive the total prize, Tesla’s operating profit will have to rise to $ 400 billion, from $ 17 billion last year.
Although Musk cannot sell any action for years, he may immediately exercise the voting rights of these actions at the assemblies, increasing his control over the company. If you receive all shares and not sell any, your stake in Tesla would rise from the current 13% to about 25%. Taxes can reduce this percentage.
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