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Tesla shareholders met on Thursday to vote on a compensation plan for CEO Elon Musk worth close to $1tn. If approved, the package will demonstrate shareholders’ confidence the billionaire can lead his car company into an era dominated by artificial intelligence and robotics. If denied, Tesla may face the loss of a leader who once made the company name synonymous with electric vehicles.
If Musk delivers on the lofty milestones in the pay package laid out at Tesla’s 6 November annual meeting, he could become the world’s first trillionaire. To do so, he will need to guide Tesla to $8.5tn in market capitalization, eight times what it’s worth today. He will also be required to deploy millions of autonomous vehicles and humanoid robots and sustain the company’s bottom line in the hundreds of billions over the next decade.
The major goals of the compensation plan, split into 12 tranches, lay out a path for Tesla to reach the enormous market capitalization. If he brings the company to that financial height, Musk will be able to cash in on an additional 12% of the company’s stocks. To do so, he has to be vested in the company for at least 7.5 years. He will also have to help develop a long-term succession plan for the company he has led for more than 20 years. The stock options provided by the new compensation plan, on top of shares guaranteed to him in his 2018 package, would leave Musk with 25% ownership of Tesla’s stock. As of 5 November, Tesla stock was trading close to its 52-week high, at around $450 per share.
Over the course of a decade, Musk will be required to deliver 20m of Tesla’s electric vehicles to buyers, sell 10m active full self-driving subscriptions, develop and sell 1m humanoid robots and deploy 1m robotaxis in commercial service.
Musk will also be required to bring the company to $400bn in actual earnings for four consecutive quarters. Tesla’s actual earnings for the third quarter of 2025 were $4.2bn, down 9% from the year prior.
As of November, Musk’s net worth was $460bn, the highest in the world, according to Bloomberg’s Billionaire Index.
Reviving a rescinded package
Shareholders are also considering a plan that would compensate Musk after his 2018 compensation plan was invalidated by a court in Delaware. The pay plan, worth an estimated $56bn, was challenged by a single stockholder who won his case. The Delaware court of chancery rejected Musk’s pay package twice. If shareholders approve the plan in Thursday’s vote, Musk is likely to be paid the huge sum whether or not Tesla and Musk win an appeal of the case.
After Musk’s 2018 pay package was first rescinded, he moved Tesla’s corporate home from Delaware to Texas. He followed suit with SpaceX and other companies’ headquarters. In 2024, under Texas law, shareholders once again voted to approve the pay package.
But Delaware’s so-called “court of equity” once again ruled against one of the largest CEO payouts in modern history. Following that unfavorable ruling, Musk took to social media to voice displeasure with the state and its “activist chief judge”, arguably fueling a series of corporate exits that Delaware lawmakers have attempted to staunch with legislation.
In considering whether Musk had undue influence in being awarded that 2018 pay package, the Columbia Law School professor Eric Talley noted that the judge recognized that other “superstar CEOs” like Meta’s Mark Zuckerberg and Amazon’s Jeff Bezos were not awarded this kind of incentive-based contracts.
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