Elon Musk's Proposed $1 Trillion Pay Package Sets New Record for CEOs

Tesla's board has proposed a $1 trillion compensation package for CEO Elon Musk, the largest corporate pay package in history. The package is 18 times the size of a contested 2018 pay package and is close to the company's current market valuation. Musk's previous compensation package was worth $29 billion in restricted stock.

Tesla Inc. (TSLA.O) has proposed a record-breaking $1 trillion compensation package for CEO Elon Musk, marking the largest corporate pay package in history. The proposal, which will be voted on by shareholders at an annual meeting on Nov. 6, underscores Musk's significant influence over the company as it aims to become an AI and robotics powerhouse [1].

The compensation package, if approved, would grant Musk up to 12% of Tesla's stock, worth approximately $1.03 trillion if the company meets its target market value of $8.6 trillion over the next decade. This plan requires a nearly eightfold increase in Tesla's valuation, or about $7.5 trillion, over the next decade [1].

The proposal comes as Musk has consistently pushed for a larger stake in the company to gain more control, despite ongoing legal battles over his 2018 pay package, valued at $56 billion [1]. The regulatory filing notes that traditional compensation packages for executives at other companies were deemed inappropriate for designing Musk's incentive compensation [1].

Musk would receive no salary or cash bonus under the proposal, with the compensation tied to stock awards that vest only if Tesla meets both market cap and operational targets, such as selling millions of electric vehicles (EVs), deploying robotaxis, and delivering AI-powered humanoid robots [1].

Tesla's shares were up about 2% in premarket trading following the announcement, reflecting investor sentiment on the proposed compensation package [1]. The company's board earlier this year approved an interim compensation package worth about $29 billion in restricted stock to keep Musk at the helm through at least 2030 as the company pivots to an AI-first strategy [1].

The proposal has sparked debate over governance and succession, as fully earned, the award would materially increase Musk's voting power from his roughly 13% stake [1]. Critics argue that the package rewards Musk at investors' expense, while supporters contend that it aligns Musk's incentives with long-term growth [1].

Tesla's move to Texas in 2024 following a Delaware judge voiding Musk's 2018 package has further complicated the situation, with the appeal still pending at the state's Supreme Court [1].

References:
[1] https://www.reuters.com/business/autos-transportation/tesla-award-musk-an-unparalleled-1-trillion-depending-performance-2025-09-05/
[2] https://www.entrepreneur.com/business-news/tesla-offers-elon-musk-record-1-trillion-pay-package/496761
[3] https://finance.yahoo.com/news/tesla-urges-investors-vote-favor-103206267.html