Tesla’s board has proposed a 10-year pay package for CEO Elon Musk, tied to 12 milestones, that could be worth about $1 trillion if he raises Tesla’s market value from about $1.09 trillion to $8.5 trillion and meets a set of operating targets. Shareholders approved the plan in November 2025.
Tesla has proposed a new 10-year compensation plan for CEO Elon Musk that could make him the world’s first trillionaire, according to a proxy filing released on Sept. 5, 2025. The award is tied to 12 milestones and would pay out only if Musk grows Tesla’s market value from about $1.09 trillion to as much as $8.5 trillion and the company meets a series of operating goals, including targets for robotaxis, humanoid robots and profits. The proposal follows a years-long legal fight over Musk’s previous pay package, which was valued at about $56 billion, and it was put to a shareholder vote at Tesla’s annual meeting.
What is inside the pay package
The plan is a performance award split into 12 tranches of restricted stock. Each tranche vests only if two conditions are met: Tesla’s market capitalization reaches a set level, and the company hits one of several operating milestones. The market value targets rise in steps up to $8.5 trillion. The operating goals described in the filing include delivering 20 million vehicles, reaching 10 million active Full Self-Driving subscriptions, putting 1 million robotaxis into commercial operation, delivering 1 million Optimus humanoid robots and reaching $400 billion in adjusted earnings before interest, taxes, depreciation and amortization. If the targets are not met, the corresponding shares do not vest. If Musk reaches every milestone, his stake in Tesla would rise from about 13% to roughly 25%, according to the filing.
The bets on robotaxis, robots and AI
The operating milestones show how much of Tesla’s future the board ties to technology beyond selling cars. The robotaxi goal depends on Tesla’s self-driving software, which Musk has promised for years and which remains under development and regulatory scrutiny. The robotics target rests on Optimus, a humanoid robot that Musk says could eventually perform repetitive or dangerous work. Both depend on Tesla’s artificial intelligence work. Supporters see these businesses as the reason Tesla could be worth far more than a carmaker. Skeptics note that none of them yet produces significant revenue.
The 2018 pay fight
In 2018, Tesla’s board approved a pay plan for Musk that was later valued at about $56 billion, the largest executive award at the time. It was also built on steep market value and operating targets, and Musk met them within a few years. A shareholder sued, arguing that the board was not independent of Musk and that the package was excessive. In January 2024, a Delaware Chancery Court judge struck down the package, calling it an “unfathomable sum.” Tesla’s board responded by asking shareholders to approve the 2018 package again, which they did in June 2024, and by moving the company’s legal home from Delaware to Texas. The new proposal comes amid that continuing dispute.
The board’s case
In the proxy filing, Tesla’s board argues that keeping Musk focused on Tesla is essential to the company’s growth, noting that he also runs other companies, including SpaceX and xAI. The board describes the award as a way to retain Musk and to tie his pay entirely to results that would also benefit shareholders. Under the plan, Musk would receive a large reward only if the company’s value rises roughly eightfold.
The critics’ case
Critics of the plan, including some corporate governance specialists and investor groups, have questioned whether any executive award of this size can be justified. They also point to dilution: issuing new shares to Musk would reduce the ownership share of other investors. Some argue that Musk, already one of Tesla’s largest shareholders, has enough incentive to lift the stock price without an additional award, and that the board is too close to its CEO to judge his pay independently.
The scale of the award
If Musk met every target, the shares he would earn could be worth close to $1 trillion at the top market value goal. That figure is roughly comparable to the annual economic output of countries such as Switzerland or Saudi Arabia. Musk is already among the richest people in the world, and the plan has renewed public debate about executive pay and the concentration of wealth. Supporters say any payout would reflect enormous value created for shareholders. Opponents say no individual should be paid on this scale.
The shareholder vote
The plan required approval from Tesla shareholders at the company’s annual meeting. Musk’s supporters include many retail investors. Large institutional investors often weigh recommendations from proxy advisory firms such as Institutional Shareholder Services and Glass Lewis, both of which advised voting against the package.
Update: Tesla shareholders approved the pay package at the company’s annual meeting on Nov. 6, 2025, with more than 75% of votes cast in favor, according to the company.
The question of control
The plan would also increase Musk’s influence over the company. Musk has said publicly that he wants about 25% voting control of Tesla before building the company into a leader in AI and robotics, so that he could not easily be removed by other shareholders. A larger stake would give him more say over Tesla’s direction. Supporters say that keeps the company guided by the executive who built it. Critics say it reduces the influence of other shareholders.
What it means
The package is one of the largest executive pay proposals ever made public, and its outcome is likely to be studied by boards and investors well beyond Tesla. Whether Musk earns any of it now depends on whether Tesla can reach market value and operating targets far above its current levels over the next decade.
Sources: CNN, "Tesla proposes Elon Musk pay package that could make him the world's first trillionaire" (September 5, 2025)
