Tesla (TSLA) Surges 3.64% on 3-Day Rally Driven by $1 Trillion Musk Pay Package

Tesla Inc. (TSLA) surged 3.64% on Wednesday, marking its third consecutive day of gains and pushing the stock to an intraday high of $334.09—the highest since September 2025. The rally capped a 6.52% rise over three days, fueled by optimism around the company’s long-term strategic vision and recent corporate governance developments.

The stock’s performance coincided with the announcement of a landmark $1 trillion potential compensation package for CEO Elon Musk, unveiled in a proxy filing on September 3. The structure ties Musk’s rewards to ambitious performance milestones, including scaling Tesla’s market capitalization to $8.5 trillion, delivering 20 million vehicles, deploying 1 million Optimus robots, and achieving 1 million robotaxis in operation. To qualify for the full payout, Musk must remain in a leadership role for a decade and develop a succession plan, reinforcing alignment with shareholder interests.

Board members emphasized that Musk’s extended tenure is critical to executing Tesla’s expansion into AI and robotics, areas central to its future growth. The package also includes a non-binding proposal to integrate Musk’s xAI startup into Tesla’s ecosystem, potentially enhancing autonomous driving capabilities. However, the plan faces legal scrutiny, as Tesla appeals a 2024 Delaware court ruling that invalidated Musk’s 2018 $56 billion pay package over governance concerns. New bylaws now require shareholders to own at least 3% of stock to file lawsuits, a move aimed at deterring litigation.

Investor sentiment remains mixed. While Tesla’s forward earnings multiple has exceeded 200x, reflecting optimism about its growth trajectory, analysts caution that the $8.5 trillion valuation target represents an unprecedented challenge. The company’s recent robotaxi launch in June 2025 has reignited interest in its AI-driven initiatives, but Musk’s concurrent roles across SpaceX, xAI, and political ventures have raised concerns about governance risks. The board’s insistence on a succession plan underscores these challenges, even as it reaffirms confidence in Musk’s leadership.

With the compensation package set for a shareholder vote in November, Tesla’s stock trajectory will depend on its ability to meet escalating performance benchmarks. The package’s success hinges on navigating legal uncertainties, maintaining Musk’s focus, and delivering on ambitious operational goals—factors that could either solidify Tesla’s market dominance or expose vulnerabilities in its reliance on a single individual.