Tesla Inc - on Sept 3 board approved updated indemnification agreement - SEC filing

Tesla Inc - on Sept 3 board approved updated indemnification agreement - SEC filing

Tesla Inc. has taken a significant step to solidify its future direction by updating its indemnification agreement and proposing a new compensation package for CEO Elon Musk. The latest proposal, approved by the board on September 3, 2025, could see Musk's compensation reach as high as $1 trillion over the next decade.

The new 10-year pay package, detailed in a recent SEC filing, ties Musk's compensation to stringent performance targets, including lifting Tesla’s market value from its current level of about $1 trillion to over $8 trillion. If these goals are met, Musk would receive more than 423 million new shares, giving him roughly a quarter of the company’s voting power [1].

To achieve these targets, Musk must oversee the delivery of 20 million vehicles and one million Optimus robots, as well as deploy one million robotaxis and increase the number of Full Self-Driving (FSD) subscribers by 10 million. Additionally, the plan requires boosting the company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) to $400 billion over the next decade, a substantial increase from last year’s $16.6 billion [1].

The proposal follows a previous $29 billion compensation plan that was invalidated by a Delaware court ruling. Tesla shareholders will have the opportunity to vote on this new package at the company's annual meeting later this year.

The updated indemnification agreement aims to protect Musk and Tesla from potential legal liabilities, ensuring that Musk remains focused on steering the company through its critical turning point. The filing highlights Musk's "singular vision" as vital for guiding Tesla into a future of "sustainable abundance" through innovative and affordable technologies at scale [1].

The new compensation package reflects Tesla's ambitious goals and the company's push into autonomous technology and robotics. The proposal also includes a significant increase in Musk’s voting power, potentially granting him greater control over the company’s strategic direction [1].

Tesla's stock price has seen a positive response to the new proposal, with shares trading higher in the premarket on September 5, 2025 [2]. The company's board has framed the targets as significantly tougher than Musk's 2018 plan, requiring the generation of roughly $7.5 trillion in shareholder value to unlock the full award [2].

In summary, Tesla Inc.'s updated indemnification agreement and Elon Musk's new compensation proposal reflect the company's ambitious goals and its commitment to innovation in the electric vehicle and autonomous technology sectors.

References:
[1] https://americanbazaaronline.com/2025/09/05/elon-musk-faces-1-trillion-tesla-compensation-proposal-467247/
[2] https://www.gurufocus.com/news/3095938/tsla-tesla-shares-climb-as-musk-targets-2-trillion-valuation-in-pay-plan