Tesla's $1T Musk Pay Package: Growth Incentive or Excessive Reward?

Tesla Inc. (TSLA) shareholders will vote on November 6 on a controversial compensation package for CEO Elon Musk, valued at up to $1 trillion, according to a Yahoo video. The proposal, which hinges on ambitious operational milestones, has sparked intense debate among investors, with key stakeholders like Atreides Management's Gavin Baker backing the plan despite widespread opposition, according to a Stocktwits article.

The package requires Tesla to achieve a $8.5 trillion market capitalization over the next decade and meet targets for vehicle deliveries, robotaxi deployment, and humanoid robot development, the Stocktwits article reported. If approved, Musk would receive no salary but could earn up to 423.7 million shares in installments over 10 years, and that structure mirrors Musk's 2018 pay deal, which was voided by a Delaware court for being excessive.

Baker, whose firm supports the package, argued that performance-based incentives are critical for sustaining Tesla's growth trajectory, writing on X that "shareholders should generally support thoughtfully structured performance-based CEO compensation packages because they incentivize CEOs to create transformational growth and value." Tesla Board Chair Robyn Denholm has warned that Musk might leave if the package is rejected, potentially destabilizing the company.

However, major institutional investors, including CalPERS and the New York State Retirement Fund, plan to vote against the proposal. Proxy advisory firms Glass Lewis and Institutional Shareholder Services also recommended rejection, labeling the package excessive, and Musk has criticized these groups as "corporate terrorists."

The pay package's approval could significantly impact Tesla's stock, which has surged 9% this year and 76% over the past 12 months. Stocktwits data shows retail sentiment remains bearish, though message volume has stabilized. Analysts remain divided, with some viewing the package as a necessary tool to retain Musk's leadership and others decrying it as a reward for already sky-high valuation expectations.

Separately, a Yahoo report says OpenAI is eyeing a $1 trillion IPO by late 2026, and Bitget data shows Zcash's (ZEC) 25% surge in futures open interest (the Bitget release provides the detail). Yet Tesla's governance battle underscores the high stakes of aligning executive compensation with long-term growth in speculative tech sectors, as noted in the Yahoo video.