Tesla Proposes Whopping $1 Trillion Pay Package For CEO Elon Musk

According to the special committee, Musk must create nearly $7.5 trillion in additional shareholder value for him to receive the full award.
Tesla CEO Elon Musk attends the official opening of the new Tesla electric car manufacturing plant on March 22, 2022 in Germany. (Photo by Christian Marquardt - Pool/Getty Images)
Tesla CEO Elon Musk attends the official opening of the new Tesla electric car manufacturing plant on March 22, 2022 in Germany. (Photo by Christian Marquardt - Pool/Getty Images)
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Anan Ashraf·Stocktwits
Updated Sep 05, 2025 | 8:10 AM GMT-04
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EV giant Tesla Inc (TSLA) has proposed a new compensation package for its CEO, Elon Musk, the company said in a proxy filing on Friday, aimed at making the company “the most valuable company in history.”

Shares of the company jumped over 2% in the pre-market session at the time of writing.

As per the new pay plan, Musk will receive no salary but will be awarded up to 423.7 million in shares of Tesla in installments when the company meets certain milestones, including an increase in earnings, vehicle deliveries, robotaxis, and humanoid robots. The new award will take at least seven-and-a-half years and up to 10 years to vest in total.

The new package, dubbed the 2025 CEO Performance Award, is valued at about $1 trillion. Musk’s previous pay package, initially approved in 2018 and valued at over $50 billion, was voided by a Delaware court, which deemed it excessive, last year. Musk appealed the court’s order in March, and Tesla established a special committee to consider matters concerning Musk’s pay.

“Simply put, retaining and incentivising Elon is fundamental to Tesla…” members of the Special Committee, Robyn Denholm and Kathleen Wilson-Thompson, said in a letter to shareholders. The members said they decided on the new package after a “rigorous, seven-month process that involved evaluating numerous novel compensation structures,” and noted that it is “designed to align extraordinary long-term shareholder value with incentives that will drive peak performance from our visionary leader.”

The special committee urged shareholders to approve the new package at the November 6 annual meeting, which is subject to Musk meeting a series of goals. This includes operational milestones focused on reaching adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) of up to $400 billion. It also includes rolling out new or expanded product offerings, including one million robotaxis in commercial operation and delivery of one million AI Bots, all while growing the company’s market capitalization by trillions of dollars.

“In 2018, Elon had to grow Tesla by billions; in 2025, he has to grow Tesla by trillions — to be exact, he must create nearly $7.5 trillion in value for shareholders for him to receive the full award,” the special committee said. The company is currently valued at about $1 trillion, and the pay package envisions a total market capitalization of $8.5 trillion.

The number of shares that may be earned under the package is divided into 12 tranches, each consisting of over 35 million shares, with each tranche earned by achieving specific market capitalization and operational milestones. The first tranche requires Tesla to achieve a market capitalization of $2 trillion, in addition to meeting an operational milestone.

The company must also sell 12 million more electric vehicles for Musk to get his full package, more than the eight million vehicles it has produced since its founding. The new package is designed to deliver approximately 12% more voting power to Musk in exchange for driving performance growth.

Last month, Tesla announced that it had approved an interim award of 96 million shares of restricted stock to CEO Elon Musk, valued at approximately $29 billion based on the stock’s last closing price. The company clarified that Musk will not be able to keep this award in addition to the options he will be awarded under the 2018 CEO performance award, should the courts rule in his favor.

TSLA stock is down by 16% this year but up about 47% over the past 12 months. 

Read also: Dow Futures Edge Lower Ahead Of Crucial August Jobs Report: TSLA, AVGO, LULU, DOCU Among Stocks To Watch

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