Texas (BN24) – Tesla’s board has unveiled a proposed $1 trillion compensation package for CEO Elon Musk, a plan that would become the largest corporate pay award in history and dramatically expand his control over the electric vehicle giant as it pivots toward artificial intelligence and robotics.
The proposal, disclosed in a regulatory filing, underscores the board’s confidence in Musk’s leadership despite mounting competition from Chinese automakers and slowing demand for electric cars. It would grant Musk as much as 12% of Tesla’s stock if the company reaches a market value of $8.6 trillion — nearly eight times its current level — with vesting tied to both market capitalization and operational milestones such as robotaxi deployment and humanoid robot production.
Musk, already Tesla’s largest shareholder with a roughly 13% stake, would see his influence grow substantially if the award is approved. The package dwarfs his contested 2018 compensation plan, valued at $56 billion, which remains tied up in legal disputes after a Delaware court struck it down earlier this year. Tesla has since reincorporated in Texas and is appealing the ruling.
The board insists the unprecedented award is essential to keeping Musk focused and incentivized, particularly as the company pushes to become the world’s most valuable business. But critics say Musk, as majority shareholder, already has strong financial motivation and warn the plan could worsen governance risks.
“This is a ridiculously large pay package. It raises lots of questions, but last year Musk moved Tesla from Delaware to Texas in order to avoid all those questions,” said Brian Quinn, a professor at Boston College Law School. “Given that Tesla’s stock price is basically all vibes and appears to have very little to do with the automaker’s actual performance, I suspect they will approve this package.”
Tesla emphasized that Musk will not receive a salary or cash bonus under the plan, echoing the structure of his previous compensation, with all rewards tied directly to performance. The company said the package reflects shareholder feedback and includes stronger governance safeguards, with the proposal reviewed by a committee of independent directors ahead of a November shareholder vote.
The filing comes as Musk has outlined sweeping ambitions for Tesla’s future. He has predicted that Optimus humanoid robots could one day account for 80% of Tesla’s value, potentially driving the company’s worth to $25 trillion.
The announcement has also been clouded by Musk’s growing involvement in U.S. politics. He has publicly clashed with President Donald Trump and recently launched the “America Party,” raising concerns among investors about potential distractions. The Tesla board has urged shareholders to reject a proposal that would require the company to adopt a political neutrality policy.
“It really seems like what Elon wants, Elon gets from the board and from his shareholders,” said Douglas Chia, president of Soundboard Governance, an independent corporate governance advisory firm. “As ridiculous as it is, they’ll pass it, I have no doubt.”
Tesla shares rose about 3% after the package was disclosed.
