Tesla shareholders plan to pay Musk one trillion dollars - Conditions named

According to the company, more than 75% of those present at the annual shareholders’ meeting voted in favor of the package, which provides for up to 423.7 million additional Tesla shares to be distributed over the next ten years.

Musk to get trillion, but there are conditions

The Tesla CEO does not receive a fixed salary. The value of the shares under the new package could reach 1 trillion dollars if the company achieves a market capitalization of 8.5 trillion dollars and meets several operational and financial targets.

The compensation will be distributed in 12 equal tranches, and receiving the full package would equal 275 million dollars per day, the largest bonus in corporate history.

To meet the package’s conditions, Tesla’s stock must rise by 466% from its current level, about 70% higher than that of the world’s most valuable company, Nvidia, which last week reached a capitalization of 5 trillion dollars. According to Bloomberg, Musk’s fortune is estimated at 473 billion dollars, mostly due to his stakes in Tesla, SpaceX, and xAI.

Musk emphasized that the package is not meant to increase his personal wealth but to maintain control over the company:

"It’s not like I’m going to go spend the money," Musk said on a call with investors last month. "There needs to be enough voting control to give (me) a strong influence – but not so much that I can’t be fired if I go insane."

Tesla facing crisis

At the same time, Tesla is experiencing a difficult year: sales and profits have declined in the first half of the year, and the company may lose billions due to reduced government support for electric vehicles in the United States.

Musk and the company’s leadership are betting on robotics and artificial intelligence, planning the launch of self-driving cars, a robotaxi fleet, and humanoid robots. Musk believes that robotics will eventually surpass Tesla’s automotive business and any other business:

"I think it’s going to be the biggest product of all time by far," he said. "So like bigger than cell phones, bigger than anything. I guess a way to think about it is that every human on Earth is going to want to have their own personal R2D2 or C3PO."

However, these products are still in development, and even after the approval of the compensation package, there is no guarantee that Musk will receive all the potential hundreds of millions of shares. To do so, he must resolve Tesla’s current challenges and deliver on his ambitious promises for the future.

Earlier, at the end of October, Tesla’s board of directors warned shareholders that the company risked losing Elon Musk if his 1 trillion compensation package was not approved.

As previously reported, on October 1, billionaire Elon Musk became the first person in history with a net worth of half a trillion dollars.