Tesla According to a financial filing on Friday, investors are asking them to approve a pay plan for yet another feature of CEO Elon Musk.
The total package is worth around $975 million based on the maximum payment, assuming the number of shares remains.
The proposed plan for Musk, already the world’s wealthiest individual, would be granted 12 equity tranches if Tesla hits a certain milestone in the next decade. MUSK will also increase the voting power for EV makers and ambitious robotics Titans, which have been publicly demanding since early 2024.
Tesla Chairman Robin Denholm told CNBC’s Andrew Ross Sorkin that the CEO is planned to “focus on motivating and providing for the company.”
“If he plays, he’s fair if he hits a very ambitious milestone in his plan. That’s 1% plus a $50 trillion market capitalization, and an operational milestone that has to be hit to do that.”
The full award offers more than 423 million additional shares to Mask. He currently holds approximately 13% stake in the company.
Tesla 1-Day Stock Chart.
Denholm confirmed that Tesla’s CEO pay plan does not limit how Musk spends his time or requiring him to spend the minimum amount of time per week on Tesla businesses, if approved by shareholders.
To win the first prize in the plan, Musk and Tesla will need to nearly double their current market capitalization to reach $2 trillion. The final benchmark is to reach a market capitalization of $8.5 trillion.
The operational milestones for the 2025 CEO Performance Awards include 20 million Tesla vehicles delivered, 10 million active FSD subscriptions, 1 million robots, 1 million robots delivered, and a series of coordinated EBITDA benchmarks.
Musk said at Tesla’s 2024 annual meeting that Optimus Robots could turn Tesla into a $25 trillion company. This week, he said that around 80% of Tesla’s value could ultimately come from Optimus, but no details would be provided.
The board’s pitch for the 10-year mask pay plan remains his attention split into his other ventures, dragging by the legal battle over his 2018 salary.
Mask’s corporate collection includes aerospace and defense contractor SpaceX, drilling ventures, boring companies, health technology company Neuralink, and artificial intelligence venture Xai.
Tesla is in the midst of a multi-quarter sales slump, due to an aging lineup, competition with Chinese automakers, and consumer backlash against masked political rhetoric and involvement in the Trump administration.
Tesla also said in its application Friday that it would ask shareholders at its November 6 meeting to vote on whether the company should invest in Xai, Musk’s latest venture.
Musk first came up with the idea publicly in an unofficial poll in X last July, asking whether Tesla should invest $5 billion in Xai.
Founded in Nevada in early 2023, Xai merged with Musk’s social network X earlier this year. The company currently operates a large data center in Memphis, where it plans to build another facility there to train and run a large language model and a chatbot called Grok.
Payment Plan Disputes
Musk’s new salary proposal comes after Delaware Chancery Court ruled last year that his 2018 pay plan was excessive and must be inappropriately granted and revoked by the Tesla Committee.
In that case, judge Tornetta v. Musk discovered that Tesla CEO was in charge of wage negotiations at the automaker, and his board failed to provide shareholders with legal rights before saying that Musk should vote to approve Musk’s performance-based wage plans.
The 2018 pay plan was the largest public enforcement fee plan in US history, worth around $56 billion when it was entitled.
Similar to the new proposed pay plan, Tesla had to hit a series of benchmarks related to market capitalization in order for Musk to get options.
The amount of compensation Tesla paid to directors, including Denholm, was a point of consideration for the judge on Tornetta’s matter. Denholm said during her time with the Tesla Committee that during her time with the Tesla Committee she received compensation worth $280 million, calling it “life-changing wealth.”
Musk, Denholm, and other allies of Tesla’s CEOs have criticized the Delaware court’s decision, and Tesla has even moved its place of establishment from Delaware to Texas in response to the ruling.
Tesla attempted to “ratify” its 2018 CEO pay plan after Delaware Premier Cataline McCormick eliminated it and asked shareholders to look back on her ruling and vote to recover it. McCormick said such a vote did not correct the previous issue and supported her decision in December 2024.
The case is currently being appealed in Delaware.
