Source Credit : CNBC
Tesla is asking investors to approve yet another outsized pay plan for CEO Elon Musk, according to a financial filing out Friday.
The total package is worth about $975 billion based on the maximum payout, assuming share count remains.
The proposed plan for Musk, already the world’s wealthiest individual, consists of 12 tranches of shares to be granted if Tesla hits certain milestones over the next decade. It would also give Musk increased voting power over the EV maker and aspiring robotics titan, which he has publicly demanded since early 2024.
Tesla Chairwoman Robyn Denholm told CNBC’s Andrew Ross Sorkin the plan was designed to keep the CEO “motivated and focused on delivering for the company.”
“If he performs, if he hits the super ambitious milestones that are in the plan then he gets equity — it’s 1% for each half a trillion dollars of market cap, plus operational milestones he has to hit in order to do that,” Denholm said on CNBC’s “Squawk Box.”
The full award would give Musk more than 423 million additional shares. He currently holds about a 13% stake in the company.
Denholm confirmed that the Tesla CEO pay plan, if approved by shareholders, would not put any limit on where and how Musk spends his time or require him to spend any minimum number of hours per week on Tesla business.
To obtain the first award in the plan, Musk and Tesla would need to almost double their current market cap to reach $2 trillion. The final benchmark is reaching an $8.5 trillion market cap.
The operational milestones in the 2025 CEO Performance Award include: 20 million Tesla vehicles delivered, 10 million active FSD Subscriptions, 1 million robots delivered, 1 million Robotaxis in commercial operation and a series of adjusted EBITDA benchmarks.
Musk said at Tesla’s 2024 annual meeting that Optimus robots could make Tesla a $25 trillion company. This week, he said roughly 80% of Tesla’s value could eventually come from Optimus but offered no specifics.
The board’s pitch for a ten-year Musk pay plan comes as his attention remains divided across his other ventures, and the legal battle over his 2018 pay drags on.
Musk’s collection of companies includes aerospace and defense contractor SpaceX, drilling venture The Boring Company, health tech company Neuralink and the artificial intelligence venture xAI, which has merged with his social network, X.
Tesla is in the midst of a multi-quarter sales slump due to its aging lineup, competition from Chinese automakers, and a consumer backlash to Musk’s incendiary political rhetoric and involvement with the Trump administration.
Tesla also said in the filing Friday that it will ask shareholders at the Nov. 6 meeting to vote on whether the company should invest in Musk’s newest venture, xAI.
Musk first floated the idea publicly with an informal poll on X last July, asking whether Tesla should invest $5 billion into xAI.
Founded in early 2023 in Nevada, xAI merged with Musk’s social network X earlier this year. The company now operates a massive data center in Memphis, and plans to build out another facility there to help train and run its large language models and a chatbot called Grok.
