Elon Musk Could Pocket Unprecedented $1 Trillion in New Pay Package — If He Hits Mega Milestones

Elon Musk, the visionary CEO behind Tesla and SpaceX, is no stranger to ambitious goals. But his latest challenge is a whole new level of stratospheric.

The tech titan could be on the brink of an unprecedented financial windfall — a staggering $1 trillion (£0.74 trillion) — if he manages to hit some truly monumental targets. This isn't just about a bonus; it's a pay package that could redefine the meaning of 'mega-wealthy'.

A Bet on a Trillion-Dollar Vision

Tesla's board is putting a new pay package for Chief Executive Elon Musk to a vote by investors. This proposed compensation could see him pocket up to $1 trillion (£0.74 trillion) over the next decade.

The new arrangement would see Musk, already the world's wealthiest person, receive multiple tranches of shares. The shares would be awarded as Tesla meets a series of milestones, according to a financial filing released on Friday.

The maximum payout would give Musk a 12% stake in the company. To get this, Tesla would need to hit an $8.5 trillion (£6.31 trillion) market capitalisation. This value would make such a stake worth a little over $1 trillion (£0.74 trillion) and around twice the present market value of Nvidia (NVDA), currently the most valuable company on the market.

In a letter to investors, Tesla Chair Robyn Denholm stated that keeping and motivating Elon is 'fundamental to Tesla...becoming the most valuable company in history.'

The package, she added, was 'designed to align extraordinary long-term shareholder value with incentives that will drive peak performance from our visionary leader.'

According to a report by The Wall Street Journal, the proposal would also give Musk greater voting power within the electric vehicle company.

An Empire Under One Roof

The company's proxy statement detailing Musk's payment plan also contained a shareholder proposal. This proposal suggests that Tesla acquire a stake in privately held xAI, an artificial intelligence company also owned by Musk, according to CNN. This move could help the 54-year-old tech mogul further solidify his expanding business empire.

xAI recently acquired X, the social media platform formerly known as Twitter, which Musk purchased for $44 billion (£32.64 billion) of his own money in 2022. The company did not express a stance for or against the shareholder proposal. The proposal itself does not provide details on how large a stake Tesla should take in xAI, nor at what price.

Musk's current stake in Tesla consists of 410 million shares, a holding worth $139 billion (£103.10 billion) at Thursday's closing price. That stake, combined with his interests in xAI, the rocket company SpaceX, and several other companies he has founded and runs, has made him the wealthiest person on the planet, with a net worth of $378 billion (£280.39 billion) according to Bloomberg's billionaire tracker.

He currently holds options to purchase an additional 304 million shares of Tesla. However, a judge in Delaware has twice ruled that the 2018 pay package, which granted him those options, was illegal. These rulings were made despite the package having been overwhelmingly approved by Tesla shareholders on two separate occasions.

This year, the company has once again attempted to grant those options to Musk. Including those options, he now holds an 18% stake in the company's shares.

Tesla shares almost doubled in value, reaching a record high, between election day and mid-December 2024. Investors believed that Musk's close relationship with US President Donald Trump would be a significant advantage for the company.

However, Tesla's stock subsequently lost those gains, as the company faced protests, falling sales and declining profits in response to those ties. The shares have since recovered some of those losses, but they are still down 26% from the peak in December.

The Robotaxi Gamble

Even so, Musk and his supporters on Wall Street have maintained that the company is well-positioned for future growth and success. He has consistently predicted that his plans for self-driving vehicles — including a 'robotaxi' service — will generate significant profits and value for shareholders.

These robotaxis would offer rides to passengers and also let Tesla owners rent out their cars for driverless trips while not in use. Musk has also guaranteed the arrival of humanoid robots capable of generating more sales than Tesla's car business.

So far, however, these have all been major claims from a man and a company that have frequently failed to live up to their promises. Tesla is also facing rising competition from Chinese electric vehicle manufacturers. One of them, BYD, is on the verge of surpassing Tesla in global EV sales, despite not being available for purchase in the United States.

Tesla is also up against other companies that are already ahead in providing robotaxi services. This includes Waymo, the self-driving unit of Google's parent company Alphabet, which has its own service and has partnered with Uber in some cities. Following the news, shares of Tesla (TSLA) were slightly higher in premarket trading.