September 6, Saturday: Elon Musk, the world’s richest man with a net worth of around $400 billion, could soon pocket a $1 trillion pay package from his lovechild Tesla, and become the world’s first trillonaire, but there’s a catch.
Tesla’s board of directors has proposed a new compensation package for Musk that could hand him up to $1 trillion in stock awards. According to a regulatory filing, the deal would give Musk 12% of Tesla shares, split into a dozen separate payouts.
"This is a ridiculously large pay package. It raises lots of questions, but last year Musk moved Tesla from Delaware to Texas to avoid all those questions," Brian Quinn, professor at Boston College Law School, told Reuters.
Under what conditions will Musk receive the $1 trillion pay package?
To unlock the full package, Musk must raise Tesla’s market capitalisation from its current $1.1 trillion to $8.5 trillion within the next decade. The first payout, equal to 1% of Tesla stock, would only come if the company hits a $2 trillion valuation, double where it stands today, per the New York Times.
Musk will also need to deliver on ambitious operational milestones. These include selling 20 million Tesla vehicles, nearly three times the total number of cars Tesla has sold since its founding in 2003, and scaling up new ventures like robots and robotaxis, with at least one million units sold. Another condition requires Musk to establish a clear succession plan for when he eventually steps down.
Musk must also remain Tesla’s CEO for at least 7.5 years to access any portion of the package, and a full decade to claim the entire award. Even then, he would not be allowed to sell his shares for years, though he would retain voting rights at shareholder meetings.
In a letter to investors, Tesla board chair Robyn Denholm and director Kathleen Wilson-Thompson defended the plan, writing, “Retaining and incentivising Elon is fundamental to Tesla achieving these goals and becoming the most valuable company in history.”
So while Musk would become the first executive in history to secure a trillion-dollar pay deal, critics point out that, given Musk’s political ties to Donald Trump, Tesla faced a huge rivalry from Chinese automakers like BYD.
