Elon Musk, the CEO of Tesla, might soon become the first trillionaire in the world, after the company board proposed a pay package that could result in Musk being compensated over one trillion dollars. Musk could acquire 12 per cent of the stock of Tesla on the condition of meeting all of the performance criteria of the company, which are still subject to approved, and this could bring him an additional 423.7 million shares. At the current share price, these shares would now be worth about 143.5 billion, but the package could only become a reality when Tesla is worth 8.5 trillion.
This is a big plan that will establish a number of milestones that Elon Musk will follow in order to make sure Tesla further grows and expands. These targets would not just guarantee the pay package but would also catapult Tesla into valuations far higher than it is currently valued at (which is significantly lower than it needs to reach: currently, it is at only $8.5 trillion). According to analysts, the package is designed to help Tesla keep Musk focused on Tesla as he is handling several major projects, including SpaceX, xAI, and X (formerly Twitter).
Now Musk holds approximately 410 million shares in Tesla at a price of about 139 billion dollars and has an overall net worth (including investments in his other businesses) of about 378 billion dollars. The compensation package can possibly be driven by the fact that Musk is a relatively small shareholder of the company, holding only 13 per cent of the stock, according to Ross Gerber, CEO of Gerber Kawasaki, and an early Tesla investor, hoping that Musk will remain in control of the company.
The bid is similar to a compensation package offered by Musk in 2018 that shareholders passed but was subsequently overturned by a Delaware court because of his position as a board member. The incentives are designed to propel ambitious growth levels but ensure Musk stays focused on Tesla’s long-term vision.
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