Tesla's board has proposed an unprecedented pay package for its CEO Elon Musk: around $1 trillion worth of shares, Bloomberg reports.
It's a major escalation in the firm's increasingly desperate attempts to encourage its highly divisive leader to stick around and stay attentive. That's despite Tesla's core business imploding over the past year, largely the result of Musk's alienating behavior and surging international competition.
"Simply put, retaining and incentivizing Elon is fundamental to Tesla achieving these goals and becoming the most valuable company in history," chair Robyn Denholm and director Kathleen Wilson-Thompson wrote in a shareholder letter.
However, that $1 trillion figure comes with some significant asterisks. Musk will have to work for the money, growing the flailing automotive company to a staggering market value of at least $8.5 trillion — almost eight times its current $1.1 trillion valuation today.
That's more than double the valuation of the world's most valuable company today, the AI chip maker Nvidia. It would also make Musk, currently the richest man in the world, the first trillionaire.
A full payout, still a decade away, would require Tesla to achieve some extraordinarily ambitious benchmarks. At the same time, as Bloomberg reports, the additional shares would raise Musk's personal stake to at least 25 percent, per the firm's filing with the Securities and Exchange Commission. Last year, Musk warned that he's "uncomfortable growing Tesla to be a leader in AI & robotics without having ~25 percent voting control," comments that amounted to "blackmail," according to some investors.
The latest offer comes after Musk's 2018 pay package, which was valued over $50 billion at the time, was struck down by Delaware judge Kathaleen McCormick in early 2024. In December of last year, the same judge struck down the pay package yet again after shareholders voted to reinstate it.
But last month, Tesla awarded its controversial CEO a whopping $29 billion worth of its shares, arguing that the "war for AI talent is intensifying" and that "Elon has not received meaningful compensation for eight years since the 2012 CEO Performance Award was last earned in 2017."
The latest $1 trillion offer once again highlights the sheer control Musk maintains over the company. That's despite an extremely turbulent year so far, with his stint at the helm of the so-called Department of Government Efficiency greatly angering Tesla customers and investors alike. The company's finances have been in free fall as car sales continue to slump across multiple quarters.
His promises to return to lead his businesses once more by leaving politics behind — while simultaneously vowing to create his own political party to oppose the GOP — have proved enough to keep Tesla's shares afloat, at least for now.
Tellingly, shares popped over two percent today in the wake of the latest pay package announcement.
As car sales continue to flag, the company has turned its attention to its humanoid robot, dubbed Optimus, which has failed to impress so far, and an autonomous ridehailing service, whose launch has been mired in chaos.
But according to Bloomberg, Tesla's board met with Musk ten times to determine that its vehicle fleet would continue to be one of four core product lines, alongside its driver-assistance tech, robotaxis, and robots.
How the company might pull off its major reimagining remains dubious at best. Earlier this week, Tesla revealed its new "Master Plan Part IV," a document void of specifics and teeming with trendy corporate buzzwords.
Despite the chaos Musk has wrought, he remains shackled to his carmaker's destiny.
"It’s a big pay package but Tesla needs to keep its biggest asset in Musk as CEO," Tesla bull and Wedbush Securities analyst Dan Ievs told CNN. "In this AI era Musk now will drive its next leg of growth."
"The Board had a $1 trillion dollar decision and made the right one," Ives argued.
Others took a notably different tone.
"The reason the board is paying him is he’s willing to say things that other CEOs aren’t willing to say or get away with," analyst and Tesla critic Gordon Johnson told CNN, calling Musk a "master manipulator."
"Things are going to get worse for them, not better," he added. "Is Tesla going to go to $8 trillion? Abso-f**king-lutely not."
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