Elon Musk, Tesla CEO, is on track to become the world's first trillionaire. The company's board revealed a huge new pay package that could lead to Musk and Tesla being paid $1 trillion if they handily meet ambitious performance goals.
Under the proposal, Musk would receive 12 percent of Tesla's stock if performance standards are met by the company. Other important conditions include Tesla's market value climbing to at least $8.5 trillion. By today's valuation, this would seem to require a giant leap in growth.
Under the proposal, Musk could receive 423.7 million new Tesla shares, CNN reported. At current prices, those shares are valued at $143.5 billion. If the market value of Tesla were to climb to the target he suggested, the total value of the deal would be $1.03 trillion.
"This is all because Musk is scared of being kicked out of Tesla now, because he only owns 13%," said Ross Gerber, CEO of Gerber Kawasaki and an early Tesla investor, to CNN. There's the issue of Musk's shareholdings, and it is a key factor in why the board has lashed itself to the mast with such strong incentives.
Musk already owns around 410 million Tesla shares valued at $139 billion. He also has stakes in SpaceX, xAI, and X (previously Twitter). Now, the Microsoft co-founder is worth an estimated $378 billion, which makes him the world's richest person.
This package closely resembles a 2018 agreement that Tesla shareholders twice backed but that was rejected several months later by a Delaware judge. The judge had found at the time that Musk exercised too much control over the Tesla board.
The latest contract offer is meant to ensure Musk's attention remains fixed on the long-term growth of Tesla as his other ventures have come under scrutiny. The Tesla board had previously approved an interim deal worth $29 billion to keep Musk with the company until 2030.
Even as the stock market's wild swings have continued in recent months, Musk hasn't stopped moving ahead with Tesla's grand plans, such as robotaxis and humanoid robots. Supporters say his vision would make the company one of the most valuable in the world. Should shareholders approve the $1 trillion package, Musk would remain the driving force behind Tesla for decades to come.
