For a while now, Tesla CEO Elon Musk has seemed awfully distracted.
His past few years in non-Tesla activities include: buying and renaming Twitter; going all in on President Donald Trump’s election campaign and then an obscure Wisconsin Supreme Court race; a lot of babymaking, plus attendant drama; and months spent standing up the so-called Department of Government Efficiency. Meanwhile, Tesla sales have slid as the electric-car maker faces fierce competition from Chinese manufacturers and rejection from buyers turned off by his politics.
Now a new and unprecedentedly gigantic $1 trillion pay package proposal from the Tesla board will attempt to recenter Musk’s focus on the automaker. Maybe “automaker” is the wrong term: For years now, Musk has argued that Tesla should be valued as an autonomous vehicle and robotics firm. He has said that the earning potential of those products—their potential to change the global economy—would justify eye-wateringly high numbers. “Extreme execution is needed, but a valuation of $20 trillion for Tesla is possible,” he posted in July. That’s five times the value of the current market-cap leader, Nvidia.
The goals set out in the proposed pay package, which will have to be approved by shareholders in November, would force Musk to spend the next decade turning that big talk about robots and robotaxis into actual execution. In turn, Musk could become the world’s first trillionaire.
The proposal, posted as a filing to the SEC, sets out four major product-related operational goals and eight goals related to Tesla’s financial performance. In order to make the full $1 trillion, Musk would have to usher Tesla to an $8.5 trillion valuation—more than eight times its worth today and more than double the value of Nvidia.
The goals, to be met within the next 10 years, include:
20 million vehicles delivered
10 million active Full-Self Driving subscriptions
1 million robotaxis in commercial operation
1 million robots delivered
$400 billion in adjusted EBITDA
An $8.5 trillion valuation
Musk would receive progressively higher pay based on how close he can get to these financial goals.
The targets are lofty and could prove especially challenging for Musk, who has missed plenty of his own product timelines by months, if not years, even as he led Tesla to its current status as the world's most valuable carmaker. Tesla has delivered 8 million vehicles since its founding in 2008, and global deliveries have slid more than 10 percent over its past two quarters.
The company doesn’t release Full Self-Driving (Supervised) subscription numbers—customers have to pay to unlock the advanced driver-assistance software—but Musk said on a recent earnings call that while subscription rates are up, “like half” of Tesla owners haven’t even tried the feature, which is often offered on a trial basis. In the US, safety regulators have opened several probes into the tech, which performs many driving tasks on its own but, because it’s not entirely reliable, requires drivers to pay attention to the road at all times.