Elon Musk on Track to Be the First Trillionaire: What This Means for Global Investors and Market Opportunities
Tesla’s board proposed on Friday a compensation package for CEO Elon Musk that could potentially make him the world’s first trillionaire, provided he achieves a series of ambitious corporate targets.
Musk, currently the world’s richest person with a net worth exceeding $400 billion according to Forbes, would need to increase Tesla’s market value eightfold over the next decade to realize the full value of the package. All compensation would be in Tesla shares, requiring shareholder approval at the company’s annual meeting on November 6.
If successful, the pay plan could add approximately $900 billion to Musk’s fortune by raising Tesla’s value from about $1.1 trillion to $8.5 trillion. This would represent the largest executive compensation package in history, potentially increasing Musk’s ownership to nearly 29% of Tesla—a remarkable level of control for a CEO.
The plan mandates that Musk remain with Tesla for at least 7½ years to begin earning shares and 10 years to receive the full amount. He must also meet highly challenging operational milestones, including deploying 1 million autonomous taxis, 1 million robots, and achieving a profit increase exceeding 24 times the current level.
Achieving these targets will be difficult, given intense global competition in self-driving cars and robotics. Tesla board chair Robyn Denholm and director Kathleen Wilson-Thompson emphasized in a letter to shareholders that retaining Musk is crucial for Tesla to become the most valuable company in history.
The package faces likely criticism for excessively rewarding Musk, especially as some investors believe his recent performance has been lackluster and his behavior damaging. Tesla’s sales and profits have declined over the past year, coinciding with Musk’s involvement in right-wing politics and a brief stint in the Trump administration, which alienated some customers.
Critics such as Natalia Renta of Americans for Financial Reform highlight the disparity between Musk’s potential trillion-dollar compensation and the median Tesla employee’s salary of under $60,000. She called the package "very outrageous" given Musk’s part-time CEO status.
Musk also oversees other ventures, including SpaceX and the AI company xAI, which owns the social platform X. The new plan places no restrictions on his time spent on these or political activities.
This pay plan resembles a controversial 2018 package that rewarded Musk with millions of shares for reaching ambitious goals. Although he met those milestones, a Delaware judge nullified the prior package after shareholders claimed it was excessive and not properly disclosed. Tesla is appealing that decision.
If the package is approved, it will be harder for dissenting shareholders to challenge it, especially since Tesla recently relocated its corporate domicile from Delaware to Texas, where laws make shareholder lawsuits more difficult.
While Tesla pioneered electric vehicles, it now trails Chinese manufacturers BYD and Geely in global sales and risks being surpassed by Volkswagen. Analysts blame Musk for focusing on the poorly selling Cybertruck rather than broader-market models. Competing companies have launched numerous electric vehicles that challenge the appeal of Tesla’s Model 3 and Model Y.
Musk has downplayed car sales, focusing instead on AI, autonomous driving, and humanoid robotics. The compensation plan envisions Tesla selling 20 million cars by 2035, up from 8 million today, which equates to roughly 1.2 million cars per year—less than last year’s sales.
Experts note that car sales alone won’t drive Tesla’s market value to the package’s ambitious targets, emphasizing the company’s bet on future growth in robotics and autonomous vehicles, though these sectors currently generate limited revenue.
On Monday, Tesla unveiled its “Master Plan IV,” envisioning an era of “sustainable abundance” powered by solar energy, autonomous transport, and robots handling menial tasks.
The board stressed Musk’s “singular vision” as vital during this pivotal phase but also signaled planning for a future CEO succession, requiring Musk to develop a succession framework to earn part of the new award.
Under the plan, Musk would receive 35 million shares if Tesla hits a $2 trillion valuation, with additional shares awarded as the value climbs to $8.5 trillion. The package is structured so Musk profits only from stock price gains above $334 per share, the closing price before the announcement.
Operating profit must soar to $400 billion from last year’s $17 billion for Musk to earn the full award. Although Musk cannot sell shares for years, he would immediately gain voting power in shareholder meetings, potentially increasing his Tesla stake from 13% to about 29%, subject to taxes.
Musk had hinted at leaving Tesla if he did not receive a larger stake, suggesting a search for ventures offering greater influence, the board noted.
The goals set are unprecedented. Tesla’s valuation would need to double that of Nvidia, today’s most valuable public company specializing in AI chips.
Musk and his brother Kimbal, a Tesla board member, recused themselves from the pay package approval process. However, Tesla’s filing states Texas law permits Musk to vote on the proposal during the November shareholder meeting.
The board dismissed benchmarking Musk’s pay against other CEOs, stating his performance goals are unmatched in scope and complexity.
Musk’s existing Tesla shares are valued at nearly $180 billion, which some critics say sufficiently motivates him to stay and drive success.
Shareholders will also vote on authorizing Tesla’s investment in xAI, a move some may oppose as company funds financing Musk’s other ventures, although proponents argue it strengthens synergies between Tesla and xAI.
Tesla’s shares rose 3.6% on Friday following the announcement.
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Tesla CEO Elon Musk’s proposed pay package, which could make him the world’s first trillionaire if ambitious growth targets are met, signals the increasing dominance of innovation-driven business models centered on AI, robotics, and autonomous technology. For businesses in Oman, this underscores the importance of aligning with futuristic tech trends and exploring opportunities in sustainable and intelligent mobility. Smart investors and entrepreneurs should closely monitor advancements in electric vehicles, AI, and robotics, while preparing for heightened competitive pressures and significant capital requirements in these sectors.
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