Elon Musk May Become a Trillionaire Because of Tesla Board’s Compensation Plan

Tesla's board of directors has proposed a payment plan that could make Elon Musk the first trillionaire in history. This record-breaking deal is projected to be worth up to $1 trillion. However, in order to receive the full value, Musk must meet a series of highly ambitious goals. These include business targets such as having 1 million self-driving robotaxis on the road and producing 1 million humanoid robots.

Board’s Reasoning Not Reflective of Reality

The board's letter to shareholders argues that "retaining and incentivizing Elon is fundamental to Tesla achieving these goals and becoming the most valuable company in history." This comes at a time when some have questioned whether Musk's attention is divided among his many ventures, including SpaceX and the social media platform X.

Critics point to the sheer scale of the proposal, which would be 18 times larger than his previous compensation package that was valued at $56 billion. That earlier deal, approved by shareholders in 2018, was later struck down by a Delaware court, leading to a new legal battle. Dan Coatsworth, an investment analyst at AJ Bell, said the pay package calls into question whether “one person [is] worth that much?”

Musk is the Problem, Not the Solution

One of the biggest reasons that the board is making a case for this compensation plan is how Tesla has been struggling. Earlier this year, Tesla collapsed around 40% in car sales in Europe and by 10% in August in China. In the domestic market, Tesla’s share of the EV market in the US fell to 38%, following below 40% for the first time since October 2017.  

However, these struggles can be connected to Musk’s public image, which has seen a sharp decline due to his role in DOGE and political statements. A survey in the UK revealed that 60% of car buyers are put off by Musk's reputation and would not consider buying a Tesla. In a YouGov poll earlier this year, 67% of Americans said they would not consider buying a Tesla, most citing Musk as the reason.   

Coatsworth summarizes this phenomenon when he states: “One minute Tesla’s board is wondering if Elon Musk is a liability to the company given his outspoken views and political distractions, the next they’re effectively saying ‘pick a number, any number’ to lock him in for as long as possible.”

This is especially as other automakers are increasing their electric vehicle offerings, creating more competition for Tesla. Notably, Tesla’s plans for more robotaxis has been lagging behind developments from Alphabet’s Waymo service and Baidu’s Apollo Go.