When someone already has billions, what can possibly keep them motivated? For Tesla’s board of directors, the answer was a record-breaking $1 trillion pay package designed to ensure Elon Musk’s attention stays firmly on Tesla.
On Friday, the company revealed a shareholder proposal that could grant Musk up to 423.7 million additional Tesla shares over the next decade. At today’s value, that’s about $148.7 billion — but if Tesla hits its ambitious growth milestones, those shares could soar to nearly $1 trillion.
To achieve this, Tesla must reach an $8.5 trillion market cap, roughly eight times its current valuation and more than double the size of any company in history.
Why Tesla Needs Musk Anchored
Tesla’s board admitted the stakes: without Musk, Tesla risks losing its identity. Musk hinted he might devote more energy to his other ventures — including SpaceX, Starlink, xAI, and X (formerly Twitter) — unless Tesla guaranteed him greater control.
Board filings put it bluntly:
“Mr. Musk singularly possesses the leadership characteristics necessary to transform Tesla and realize its long-term mission.”
For a company that relies on Musk’s vision as much as its technology, keeping him tethered to Tesla may justify the unprecedented package.
Musk’s Demand for Control
Musk has been outspoken about needing 25% voting control of Tesla. Currently, he owns around 13%.
In early 2024, he wrote on X:
“I am uncomfortable growing Tesla into a leader in AI and robotics without ~25% voting control… Unless that is the case, I would prefer to build products outside of Tesla.”
The new deal aims to grant Musk that influence, while still leaving room for shareholder checks.
Elon Musk’s Tesla Pay Packages Over Time
Here’s how Musk’s Tesla compensation has evolved, highlighting just how historic the 2025 package really is:
| Year | Structure | Potential Value | Conditions |
|---|---|---|---|
| 2012 | Stock options | ~$2.6 billion | Growth targets tied to production and valuation milestones |
| 2018 | 12 tranches of stock options | ~$55 billion | Tesla must hit $650B market cap and revenue/profit milestones |
| 2025 | 423.7M shares | Up to $1 trillion | Tesla must hit $8.5T market cap, $400B operating profit, AI/robotics milestones |
The $8.5 Trillion Vision
The package is built on Musk’s belief that Tesla will dominate AI, robotics, and autonomous vehicles. If successful, Tesla could generate $400 billion in operating profit, 20x its previous record.
Optimists like Gene Munster argue Tesla is “just scratching the surface of physical AI” — a market that could touch anything that moves, from robotaxis to humanoid robots.
Skeptics Warn of Overpromising
Critics counter that Musk’s track record is filled with missed deadlines.
“Elon Musk has been saying since 2014 ‘we’ll have a fully autonomous car next year.’ It hasn’t happened,” said analyst Gordon Johnson. “The board isn’t paying him for results, they’re paying him for the story.”
Still, Musk’s ability to sell the future has kept Tesla’s stock elevated, even through production challenges and delays.
Why Investors Might Approve Anyway
For shareholders, the logic is simple:
- If Musk fails → he earns nothing.
- If Musk succeeds → their portfolios skyrocket.
The first milestone is a $2 trillion valuation, nearly double Tesla’s current worth. Investors figure they have “nothing to lose, everything to gain.”
As Ross Gerber, early Tesla backer, explained:
“If he makes it, I make a lot of money. So who cares if he gets $1 trillion?”
Tesla’s Trillion-Dollar Gamble
This package isn’t just about money — it’s a statement. By offering Musk the chance at $1 trillion, Tesla’s board is declaring that its future lies in AI, robotics, and autonomy, not just electric cars.
For investors, this is the ultimate high-risk, high-reward bet. Musk could transform Tesla into the world’s first $8.5 trillion company — or fall short, leaving behind another trail of broken promises.
Either way, Tesla has ensured that Elon Musk and Tesla’s destinies remain inseparable for the next decade.