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05 September 2025

Tesla Unveils Record $1 Trillion Pay Package For Musk

The electric car maker ties Elon Musk’s unprecedented compensation to ambitious targets in robotaxis, humanoid robots, and a staggering $8.5 trillion market value.

On September 5, 2025, Tesla Inc. stunned the business world by unveiling a new compensation package for CEO Elon Musk that could ultimately be worth nearly $1 trillion—an unprecedented sum in the history of corporate America. The proposal, which must still be approved by shareholders, is designed to keep Musk at the company’s helm for the next decade, driving Tesla through what board members describe as a pivotal moment in its history.

The plan’s details, disclosed in a regulatory filing and outlined in a letter to shareholders, spell out a series of daunting benchmarks that Musk must achieve to receive the full payout. Chief among them: Tesla’s market value must soar to at least $8.5 trillion from its current level of about $1.1 trillion. That would make Tesla by far the most valuable company ever, dwarfing today’s corporate giants like Nvidia and Apple, according to CNN and other major outlets.

But the requirements go far beyond just boosting Tesla’s valuation. Musk will need to oversee the delivery of 20 million vehicles, the production of 1 million self-driving robotaxis, and the manufacture of another 1 million humanoid robots—known as Optimus—currently under development. Only if Tesla meets all these operational and financial targets will Musk be awarded the 423 million shares, which, at today’s prices, are worth $143 billion. Should Tesla’s stock reach the ambitious $8.5 trillion market cap, those shares would be valued at close to $1 trillion.

“Tesla does not currently have a long-term CEO performance award in place to retain and incentivize Elon to focus his energies on Tesla and lead us through this pivotal moment in our history. It’s time to change that,” Tesla’s board wrote in its letter to shareholders, as reported by CBS News. The board’s message was clear: keeping Musk focused on Tesla, amid his many ventures and high-profile distractions, is considered essential to the company’s future.

The stakes are high for both Tesla and Musk. The entrepreneur, already the world’s richest person with a net worth of $378 billion according to Bloomberg’s billionaire tracker, could become the first trillionaire if the plan succeeds. Musk’s current holdings include 410 million Tesla shares, worth $139 billion as of September 4, 2025, and options to buy another 304 million shares—though those options have been mired in legal disputes. A Delaware judge ordered Tesla to revoke Musk’s previous $56 billion pay package, despite overwhelming shareholder approval, and the company is still fighting to reinstate those options.

Wedbush analyst Dan Ives, one of Tesla’s most vocal supporters on Wall Street, told CNN, “It’s a big pay package but Tesla needs to keep its biggest asset in Musk as CEO. In this AI era Musk now will drive its next leg of growth. The Board had a $1 trillion dollar decision and made the right one.”

Indeed, Tesla’s board believes that “Mr. Musk singularly possesses the leadership characteristics necessary to transform Tesla and realize its long-term mission at an unparalleled level,” as stated in the company’s proxy statement. Yet, the board is also making plans for life after Musk, requiring that he develop a framework for CEO succession as a condition for receiving the final 70 million shares. “The board regularly discusses management succession planning and leadership development,” the statement notes, emphasizing both internal and external talent pipelines.

The new compensation package arrives at a time when Tesla’s fortunes are mixed. After a meteoric rise in its stock price—up more than 54% over the last 12 months and 143% over five years—Tesla has faced its first annual sales decline in 12 years. Quarterly profits recently plunged from nearly $1.4 billion to $409 million, while revenue also slumped, according to CBS News. The company’s stock price, which nearly doubled between election day and mid-December 2024 on investor optimism tied to Musk’s relationship with President Donald Trump, later fell as Tesla suffered from protests, declining sales, and a public falling out between Musk and Trump. Shares have recovered some ground but remain 26% below their December peak.

Despite these challenges, Tesla remains the world’s most valuable automaker by a wide margin, even though rivals like Toyota sell more vehicles and post higher profits. But competition is intensifying. Chinese electric vehicle makers such as BYD are poised to overtake Tesla in global EV sales, and companies like Waymo—Alphabet’s autonomous vehicle arm—are ahead in deploying robotaxi services, sometimes in partnership with Uber. Meanwhile, changes in U.S. law are removing key incentives for electric vehicle buyers and eliminating regulatory credits that have provided billions in revenue for Tesla. As analyst Gordon Johnson, a noted Tesla skeptic, told CNN, “Things are going to get worse for them, not better. Is Tesla going to go to $8 trillion? Abso-f**king-lutely not.”

Still, Musk and his supporters remain bullish. They argue that Tesla’s future lies in its ambitious plans for autonomous vehicles and robotics. Musk has promised that self-driving robotaxis will revolutionize transportation, allowing Tesla owners to rent out their cars for driverless rides and generating massive profits. He also envisions a major role for Optimus, the humanoid robot, predicting sales could one day surpass the company’s automotive business.

Tesla’s board is keenly aware of Musk’s many outside interests, including his ownership of SpaceX, xAI, and the social media platform X (formerly Twitter). The company’s latest proxy statement even includes a shareholder proposal that Tesla invest in xAI, Musk’s artificial intelligence startup, though it takes no position on the idea. The board warned that Musk “may pursue other interests that may afford him greater influence if he did not receive such assurances” as those provided by the new pay package.

Notably, Musk does not draw a cash salary from Tesla; his compensation is entirely tied to the company’s stock and options. This approach sets him apart from other tech moguls like Jeff Bezos and Mark Zuckerberg, who have not received additional stock grants since their companies’ IPOs, instead relying on the appreciation of their original stakes. For Musk, the new package represents both a massive potential windfall and a powerful incentive to remain focused on Tesla’s future.

Following the announcement, Tesla shares jumped about 5% in early trading, reflecting both investor enthusiasm and the high stakes of the board’s gamble. Whether Musk and Tesla can deliver on these sky-high promises remains to be seen, but the audacity of the plan has already made headlines and sparked debate in boardrooms and on Wall Street alike.

For now, the world will be watching as Tesla and its mercurial CEO set out to chase the biggest prize in corporate history—one that could reshape the company, the auto industry, and perhaps even the future of technology itself.