Tesla Shareholder Vote on Elon Musk's Compensation Package
Tesla shareholders are scheduled to vote on a proposed compensation package for CEO Elon Musk. The package is performance-based, not involving a salary, and allows Musk to acquire Tesla stock potentially valued at approximately $1 trillion, contingent on the company achieving specific metrics over a ten-year period.
Package Structure and Performance Criteria
Key performance targets include increasing Tesla's market capitalization from its current approximate $1.5 trillion to over $8.5 trillion. For context, Nvidia is currently valued at $4.83 trillion, with its CEO's annual compensation at $50 million and 3.5% company ownership.
The new package is structured into twelve tranches. The release of stock tranches to Musk is contingent on the achievement of 12 stock value growth targets, alongside separate earnings or product-specific sales targets. The stock received will be subject to a holding period, restricting immediate sale.
Tesla's board asserts that the new package is designed to incentivize Musk's continued commitment to the company, linking exceptional performance to commensurate compensation. Tesla's profits have decreased year-over-year throughout 2025. Proponents highlight that the compensation is contingent on significant company growth, which would benefit shareholders. Opponents suggest substantial compensation could still be realized even if only a subset of targets are met. Achieving all targets could result in Musk receiving the full potential value of the package.
Financial Details and Context
Elon Musk's net worth is approximately $460 billion, as reported by the Bloomberg Billionaires Index. Tesla's stock price, currently around $465 per share, reflects a significant increase since its 2010 IPO.
A previous compensation package, valued at $55.8 billion, is subject to ongoing litigation following a court ruling regarding its design process. Tesla's board has stated that Musk is entitled to tens of billions in stock for his work over the past few years, independent of the lawsuit's outcome.
Stock-based compensation valuations are dynamic due to share price fluctuations. Tesla's board conservatively values the current proposed package at approximately $88 billion. If this value were spread over ten years, it would equate to $8.8 billion annually. Proxy advisory firm Glass Lewis estimated that the combined compensation for all S&P 500 CEOs last year was approximately $9 billion, suggesting Musk's annual potential value, based on the conservative board valuation, would be comparable.
Equity Ownership and Strategic Influence
Full achievement of the package's targets would increase Musk's ownership of Tesla's voting shares to 28.8%.
Musk and Tesla's board have stated that the primary objective is increased voting influence rather than personal financial gain. Board chair Robyn Denholm remarked, "It's less about compensation and more about the voting influence." Conversely, critics, such as New York State Comptroller Tom Dinapoli, have characterized the proposal as "pay for unchecked power."
A specific target within the package involves Tesla selling one million Optimus humanoid robots, which the company is developing for both industrial and domestic applications. Musk has publicly stated a desire to maintain significant influence over the development and deployment of a "robot army" powered by Tesla software.
Historical Compensation Comparisons
The current proposed package, using Tesla's conservative valuation, is more than 33 times larger than Musk's 2018 package, which was initially valued at $2.6 billion (now exceeding $100 billion due to stock appreciation). The 2018 package itself was approximately 33 times larger than Musk's 2012 package, valued at $78 million.
Total Potential Payout and Scale
Glass Lewis projects that Musk's net take-home amount could reach $942 billion after tax-related payments, assuming all targets are met. Musk has publicly stated he would not spend the money. To illustrate the magnitude of this sum, hypothetically, if $942 billion were used for luxury purchases: Acquiring all Rolls-Royce vehicles (5,712 units at $500,000 each, totaling $2.85 billion), all global yacht sales (estimated at $4 billion annually), and the entire global private jet market ($39.84 billion annually) for a decade would total approximately $475 billion. This hypothetical scenario would leave $475 billion remaining, a sum exceeding the current net worth of the world's wealthiest individual, Elon Musk, according to the Bloomberg Billionaires Index.