Tesla Shareholders Approve Elon Musk's Trillion-Dollar Pay Package
Tesla shareholders have granted approval for an extraordinary pay package for Elon Musk, allowing him a chance to earn nearly one trillion dollars in stock over the next decade.
At Tesla's annual shareholder meeting, the measure passed with 75% of the vote, marking an overwhelming endorsement according to preliminary results.
Conditions of the Pay Package
The package stipulates that Musk will not receive a salary. Instead, he will unlock Tesla stock valued at about one trillion dollars if the company meets several ambitious targets within ten years.
- One major goal is to increase Tesla's market capitalization from approximately $1.5 trillion today to above $8.5 trillion.
Comparative Context
For context, Nvidia, the world's most valuable company boosted by the AI surge, currently holds a market capitalization of $4.83 trillion.
"Its CEO, who is seen as pivotal to the company's success, is paid $50 million per year and owns 3.5% of the company."
Musk's Wealth and Previous Compensation Disputes
Elon Musk is already incredibly wealthy, with an estimated net worth of $460 billion according to the Bloomberg Billionaires Index, largely due to Tesla's soaring stock price, which trades around $465 per share—over 400 times its IPO value in 2010.
Earlier, a $55.8 billion pay package for Musk faced legal challenges after a judge ruled that Tesla’s board had been too closely aligned with Musk during its development.
"A previous pay package that offered Musk a then-unprecedented $55.8 billion has been tied up in a lengthy court battle after a judge ruled that the board was too cozy with Musk in designing it."
Despite this, the new package represents an unprecedented incentive tied to ambitious company growth.
Author's Summary
This historic pay package ties Musk's wealth directly to Tesla’s growth, spotlighting immense ambitions and scrutiny around corporate governance.