Tesla is planning to offer Elon Musk a substantial financial incentive of $1 trillion, despite Musk already being one of the wealthiest people globally.
Elon Musk, known for his leadership at Tesla, has been focusing on other ventures in recent years. He played a significant role in the 2024 presidential campaign and was subsequently appointed as the head of the Department of Government Efficiency (DOGE) by Donald Trump upon his return to the presidency.
Musk served in this position until May, after which tensions arose between him and the president due to Musk’s criticism of a major legislative bill.
Earlier this year, a report by the Wall Street Journal indicated that Tesla’s board was actively seeking a successor for Musk, as he was dividing his attention between government duties, SpaceX, and X, formerly known as Twitter.
Robyn Denholm, Tesla’s board chair, and Musk have both denied these claims. Musk later stepped down from his government role to refocus his efforts on managing Tesla.
The board of directors at Tesla has now proposed a new compensation package that could award Musk up to 423.7 million additional shares of Tesla stock over the next ten years, contingent on shareholder approval.
These shares are currently valued at $148.7 billion based on Tesla’s recent closing price, but projections suggest they could be worth up to $1 trillion if everything goes in Musk’s favor.
For Musk to receive these shares, Tesla’s valuation would need to reach $8.5 trillion, which is eight times its current worth.
CNN notes that this would make Tesla twice as valuable as any company has ever been.
During the negotiation of the compensation package, Musk reportedly mentioned he might explore other ventures that provide more influence if the board did not meet his conditions.
According to CNN, “[The board] believes that Mr. Musk singularly possesses the leadership characteristics necessary to transform Tesla and realize its long-term mission at an unparalleled level.”
While Musk may be headed for a significant financial windfall, Tesla’s board is making it clear that his primary focus should be on the company.
Gene Munster, managing partner at Deepwater Asset Management, remarked, “The simple message the board is sending to Elon: ‘We want your attention on Tesla. Implicit in that message is the promise that he’ll have the control he’s been seeking (a 25% stake) and that it will be worth his time.”