Tesla’s Board of Directors has put forth a groundbreaking proposal for the compensation package of CEO Elon Musk, which could potentially result in $1 trillion in stock offerings if Musk manages to achieve a series of ambitious performance targets.
After not receiving substantial compensation since 2017, Musk successfully completed his previous pay package by delivering significant shareholder value through a range of performance-based “tranches.” These milestones were met, 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 to be an “unfathomable sum.” However, the company is now taking proactive steps to ensure that Musk receives his due compensation, as the Board recognizes the importance of retaining a CEO who has played a pivotal role in the success of Tesla.
While acknowledging the contributions of all Tesla employees, the Board emphasizes the critical role of Musk as the captain of the ship. The upcoming Shareholder Meeting will address various pertinent issues, as highlighted in a statement by Robyn Denholm and Kathleen Wilson-Thompson, encouraging shareholders to approve the payout.
The proposed 2025 CEO Performance Award is designed to build upon the success of previous frameworks, incentivizing Musk to meet even more challenging goals. These include operational milestones, such as reaching Adjusted EBITDA targets and introducing new product offerings like Robotaxis and AI Bots. Musk is tasked with growing the company’s market capitalization by trillions of dollars, a monumental feat that underscores the high expectations set for him.
The award comprises 423,743,904 shares divided into 12 tranches, each requiring Musk to achieve specific milestones. The Board firmly believes that Musk is the right person for the job and is committed to retaining him as the CEO. This comprehensive compensation package aims to ensure Musk’s continued leadership at Tesla, contingent on shareholder approval.
In conclusion, the proposed pay plan for Elon Musk reflects the company’s commitment to rewarding performance and incentivizing ambitious goals. With a focus on long-term success and value creation, Tesla is poised to achieve new milestones under Musk’s leadership, potentially making history as the most valuable company.