Tesla Approves $1 Trillion Salary Deal for Elon Musk Over 10 Years – What’s Behind the Mega-Payout?
- Why Is Tesla Offering Elon Musk a $1 Trillion Package?
- Musk’s Ultimatum: 25% Control or Walk Away
- Investor Split: Visionary Reward or Governance Red Flag?
- The Fine Print: High Stakes, High Risks
- Timing Troubles: Tesla’s Rocky 2025
- FAQ: Your Burning Questions Answered
In a MOVE that’s shaking Wall Street, Tesla’s board has greenlit a staggering $1 trillion compensation package for CEO Elon Musk, spanning a decade. The deal, set for a shareholder vote in November 2025, includes 96 million restricted stock options (worth $31 billion as of Friday) and ties Musk’s pay to Tesla’s ambitious AI and robotics goals. While supporters argue it’s necessary to retain Musk’s “unique” leadership, critics call it corporate governance gone wild. Here’s why this deal divides investors and what it means for Tesla’s future.
Why Is Tesla Offering Elon Musk a $1 Trillion Package?
After seven months of negotiations, Tesla’s compensation committee finalized a deal that WOULD make Musk the highest-paid CEO in history – again. The board claims this “super-ambitious incentive package” is the only way to ensure Musk stays committed to Tesla amid fierce EV competition and his other ventures (X, SpaceX, Neuralink). “He’s the only person who can unlock Tesla’s full potential in AI and robotics,” stated the board document. The package replaces Musk’s voided $56 billion 2018 plan, offering 12 performance-based stock tranches over 10 years.
Musk’s Ultimatum: 25% Control or Walk Away
Behind the scenes, Musk reportedly threatened to leave Tesla multiple times unless granted 25% voting control (he currently holds ~13%). The board feared a mass exodus of AI talent if he departed. “Elon raised the possibility of pursuing other interests,” the filing revealed. The new deal could boost his stake to 25% by 2032 if all targets are hit. Notably, Musk demanded – and got – full autonomy over Tesla’s direction with no board veto power.
Investor Split: Visionary Reward or Governance Red Flag?
Reactions are polarized:
- Pro: “Shareholders will gain enormous value if Musk delivers,” said Courtney Yu of Equilar, noting Tesla’s market cap could hit $8.5 trillion (surpassing Microsoft+Meta+Alphabet).
- Con: “This is irresponsible,” argued Kristin Hull (Nia Impact Capital). “These funds should go to R&D, not one man’s bank account.”
Major institutional investors like Vanguard and BlackRock (who backed Musk’s 2018 plan) remain silent on their voting stance for 2025.
The Fine Print: High Stakes, High Risks
The package’s success hinges on Tesla achieving milestones like:
| Metric | Target |
|---|---|
| Market Cap | $650B → $8.5T |
| Revenue/EBITDA | 10x growth |
| AI/Robotics | “Industry dominance” |
Musk gets nothing if targets are missed. But if he succeeds, his 2025 compensation could exceed $113 billion – more than Guatemala’s GDP.
Timing Troubles: Tesla’s Rocky 2025
The deal comes as Tesla faces:
- 13% stock decline YTD (as of Sept 2025)
- EV market slowdown
- Cybertruck recalls
“The board is torn between Musk being Tesla’s biggest asset and its biggest risk,” noted AJ Bell’s Dan Coatsworth.
FAQ: Your Burning Questions Answered
How does Musk’s new pay compare to other CEOs?
It’s 1,000x larger than the median S&P 500 CEO package. Apple’s Tim Cook earned “just” $99 million in 2024.
Can shareholders actually block this deal?
Technically yes, but unlikely. Retail investors (Musk’s base) hold ~40% of votes, and institutions historically back him.
What happens if Delaware courts intervene again?
The board claims no “double payout” will occur. Musk forfeits new shares if he wins his 2018 plan lawsuit.
