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Investors in the electric car maker assembled on Thursday to decide on a enormous compensation package for CEO Elon Musk valued at nearly $1 trillion. If approved, this package would showcase investor confidence that the tech magnate can steer the automaker into an age defined by AI technology and advanced machinery. If denied, Tesla could risk the loss of a pioneering CEO who previously established the corporation synonymous with EVs.

Record-Breaking Goals and Company Valuation

If the CEO meets the lofty milestones outlined in the compensation plan revealed at Tesla's annual meeting, he could be crowned the world's first person with a trillion-dollar net worth. To reach this goal, he must steer Tesla to a staggering $8.5 trillion in market value, which is 800% of its existing market cap. Furthermore, he will be obligated to roll out numerous self-driving cars and bipedal machines, while maintaining the corporate profits in the hundreds of billions in the upcoming decade.

Compensation Structure

The main goals of the remuneration structure, organized into 12 tranches, outline a path for Tesla to attain its massive market capitalization. Upon achievement, Musk would be able to realize gains on an extra 12% of the corporation's shares. To be eligible, he must remain vested with the corporation for at least 7.5 years. He will also assist in creating a future leadership strategy for the organization he has managed for in excess of 20 years. The equity incentives offered by the new compensation plan, combined with shares guaranteed in his previous compensation plan, would grant Musk with 25% ownership of Tesla's shares. As of early November, Tesla stock was trading approaching its 52-week high, at roughly $450 per stock.

Ambitious Targets

During a decade, Musk will be tasked to deliver 20 million EVs to customers, market 10 million operational autonomous driving plans, develop and sell 1 million advanced androids, and launch 1 million robotaxis in revenue-generating use.

Musk will also be required to bring the firm to $400 billion in real profits for four straight quarters. Tesla's tangible revenue for the Q3 2025 were $4.2 billion, down 9% from the previous year.

By November, Musk's personal wealth was valued at $460 billion, the top in the globe, according to market tracking.

Reinstating a Revoked Deal

Stockholders are furthermore considering a arrangement that would remunerate Musk after his 2018 compensation plan was voided by a judicial body in Delaware. The compensation package, worth an estimated $56 billion, was contested by a sole shareholder who prevailed in court. The Delaware court of chancery rejected Musk's pay package twice. If shareholders approve the plan in Thursday's vote, Musk is expected to be granted the massive amount irrespective of whether Tesla and Musk win an appeal of the case.

After Musk's 2018 pay package was initially invalidated, he moved Tesla's legal headquarters from Delaware to Texas. He followed suit with the rocket firm and other business entities. In last year, per Texas statutes, shareholders for a second time voted to approve the compensation plan.

But Delaware's often referred to as "court of equity" once again rejected one of the biggest CEO compensation packages in recent times. After that adverse judgment, Musk took to social media to voice displeasure with the state and its "prominent judicial figure", arguably sparking a wave of business departures that Delaware legislators have tried to stop with new laws.

In reviewing whether Musk had excessive control in being given that earlier remuneration deal, a prominent law professor commented that the judicial authority acknowledged that other "superstar CEOs" like the Meta chief and the Amazon founder were not granted this type of incentive-based contracts.