Tesla Proposes $1 Trillion Incentive Plan for Elon Musk, Sparking Stock Rally

Tesla shares surged as much as 5% Friday after the company filed an unprecedented compensation proposal tying Elon Musk's rewards to trillion-dollar market cap milestones. The electric vehicle Maker seeks to retain its CEO long-term with 12 performance tranches, including benchmarks of 20 million cumulative EV deliveries and commercialization of 1 million robotaxis.

The proposed package WOULD grant Musk 1% of outstanding shares (35 million shares) per achieved milestone, beginning when Tesla's valuation reaches $2 trillion. Subsequent tranches require $500 billion increments, with the final two demanding $1 trillion market cap jumps each. Investors are interpreting the plan as a bullish signal, betting Musk's personal financial incentives align with shareholder value creation.

While Tesla has delivered 7.5 million vehicles to date, its robotaxi and humanoid robot projects remain unproven. The market's positive reaction suggests confidence in Musk's ability to execute on these futuristic growth drivers, despite recent stagnation in the stock.