Tesla’s Board of Directors has put forth a new compensation package for CEO Elon Musk that could potentially result in $1 trillion in stock offerings if he meets certain ambitious performance targets. Musk, who has not received significant compensation since 2017, successfully completed his last pay package by delivering substantial shareholder value through various performance-based “tranches,” leading to the award of billions in stock.
Unfortunately, Musk was unable to claim this award due to a ruling by the Delaware Chancery Court, which deemed the payout an “unfathomable sum.” However, the company is now taking steps to ensure that Musk receives his deserved compensation, as the Board recognizes the importance of retaining a CEO who has played a crucial role in the company’s success.
The Board acknowledges the contributions made by Musk and is urging shareholders to approve the payout during the upcoming Shareholder Meeting. Robyn Denholm and Kathleen Wilson-Thompson highlighted Musk’s achievements in a statement, emphasizing the need to incentivize and reward his performance.
The proposed 2025 CEO Performance Award sets forth even more ambitious goals for Musk, including operational milestones, reaching Adjusted EBITDA targets, and growing the company’s market capitalization by trillions of dollars. Musk will need to achieve unprecedented performance milestones to receive the full award, which includes innovative structural features designed to ensure long-term CEO succession planning.
Although Musk faces significant challenges in meeting the requirements of the new pay package, the Board remains confident in his abilities and is committed to retaining him as the CEO of Tesla. This compensation package is intended to incentivize Musk to continue leading the company towards unprecedented growth and success, provided that shareholders approve of the arrangement.