Elon Musk could potentially become the world’s first trillionaire, contingent on a new pay plan Tesla introduced on Friday and his ability to achieve demanding corporate objectives.
Musk’s compensation under this scheme would consist of Tesla shares. To attain such an unprecedented thirteen-digit net worth, the Tesla CEO would be required to substantially increase the company’s market valuation over the forthcoming decade, as per the proxy statement released by Tesla. He would also need to remain with the company for ten additional years to fully acquire the entire amount specified in the package.
“Retaining and incentivizing Elon is fundamental to Tesla achieving these goals and becoming the most valuable company in history,” declared a letter sent to shareholders by Robyn Denholm and Kathleen Wilson-Thompson, both members of the Tesla board.
The proposal still necessitates shareholder approval. A vote is anticipated during an annual shareholders meeting scheduled for November 6.
The plan might encounter some opposition. In the past, Tesla shareholders have been described as being critical of Musk’s political involvement and their perception of the billionaire deviating from his responsibilities as CEO. In 2018, the company’s shareholders initially approved a comparable compensation package for Musk, although one shareholder contested the package and initiated a lawsuit against the company.
Legal challenges to the newly proposed package are also conceivable. In 2024, a Delaware judge rejected for the second time the 2018 compensation package intended for Musk, which could have seen the Tesla CEO receive over $50 billion. Similar to the proposal issued on Friday, the 2018 package was a 10-year, performance-based incentive for Musk.
Yet, elevating the company’s market value is easier said than done. Over the past year, as Musk faced controversy regarding his affiliations with Trump and his brief period overseeing the Department of Government Efficiency in the President’s second Administration, Tesla’s sales have experienced a downturn. The company’s stock value has also observed fluctuations in recent months, impacting the overall worth of Musk’s shares.
However, if the pay plan is approved and he manages to achieve the formidable targets, he could significantly increase his already world-leading net worth, potentially tripling it.
What is Elon Musk’s current net worth?
Musk’s net worth stands at $430 billion as of Friday, making him the richest person in the world.
The majority of this wealth stems from his ownership stakes in Tesla and rocket producer SpaceX, both of which he founded, in addition to the artificial intelligence company xAI.
What are the terms of Tesla’s proposed payment plan?
Presently, Tesla’s market value is just under $1.1 trillion. Musk would be required to increase that figure to $8.5 trillion over the next decade to be awarded the additional shares that could enable him to become a trillionaire. Achieving this goal would make Tesla’s market capitalization “approximately equal to the combined market capitalizations of each of Meta, Microsoft and Alphabet,” according to Tesla’s proxy statement.
Other benchmarks in the proposal that Musk would need to satisfy to receive his reward include the deployment of autonomous taxis and humanoid robots, an emerging industry in which Tesla is making substantial investments.
“Leading research analysts estimate that the humanoid robot industry could soar to approximately $4.7 trillion in global sales by 2050,” the pay plan states. “Consistent with such projections, Tesla is developing Optimus, a humanoid Bot, with the long-term vision of transforming labor and productivity both commercially and in homes.”
If Musk succeeds in fulfilling these objectives, he would be granted 423.7 million shares of Tesla stock. These additional shares could potentially add roughly $900 billion to his current net worth.
While the proposal is designed to retain Musk at Tesla for the foreseeable future and oversee an unprecedented rise in market value, it does not impose restrictions on his involvement in any of his other companies or political activities.
