To Be Paid in 12 Stages by 2035
Targeting a Market Cap of $8.5 Trillion
Tesla's board of directors has unveiled a new compensation package of unprecedented scale in U.S. corporate history to secure the long-term leadership of CEO Elon Musk. If this package is approved at the upcoming shareholders' meeting, Musk is expected to receive up to $1 trillion (approximately 1,386 trillion won) in stock, depending on future business performance.
To Be Paid in 12 Stages by 2035... Targeting a Market Cap of $8.5 Trillion
According to documents recently submitted by Tesla to U.S. financial authorities, the board has proposed the "2025 CEO Performance Compensation Plan," which would grant Musk shares equivalent to 12% of the company’s total common stock, distributed in 12 stages through 2035. This package could raise Musk’s current stake (about 13%) to as much as 25%.
To receive the full amount of this massive compensation, Musk must achieve extremely challenging goals. The first stage requires Tesla’s market capitalization to reach $2 trillion-nearly double its current value-while the ultimate target is an astronomical market capitalization of $8.5 trillion.
In addition, the compensation plan includes specific business performance targets. These include delivering 20 million vehicles, securing 10 million subscribers for the Full Self-Driving (FSD) software, delivering 1 million robots, launching 1 million robotaxis into commercial operation, and achieving $400 billion in EBITDA (earnings before interest, taxes, depreciation, and amortization), all of which are related to Tesla’s core future businesses.
The background for Tesla’s board proposing such a bold compensation package lies in the invalidation of the previous plan decided in 2018. The earlier $55.8 billion package was voided by a Delaware court due to a lawsuit from a minority shareholder, who argued a lack of board independence. Although Tesla’s board appealed the decision, the new compensation plan appears to be intended to secure Musk’s long-term contributions regardless of the outcome of the trial.
Tesla's board of directors has newly proposed a plan to provide CEO Elon Musk with a massive compensation package based on future business performance. Photo by Reuters and Yonhap News Agency
Tesla’s board stated, "Elon Musk’s leadership and vision are essential for the company to grow into the most valuable enterprise in history," emphasizing that this proposal is a fundamental measure to motivate Musk and ensure he remains with the company.
The compensation plan will be put to a shareholder vote for final approval at the shareholders’ meeting scheduled for November 6. Following the news on the 5th (local time), Tesla’s stock price rose by more than 3% on the New York Stock Exchange.
Musk has been the world’s richest person for several years, and according to Forbes, his current net worth exceeds $400 billion (approximately 556 trillion won).
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