On 6 September 2025 Tesla’s board unveiled a proposed compensation plan that could award CEO Elon Musk up to $1 trillion if he meets aggressive growth and performance targets, aiming to keep him at the company through a decade of expansion.
Key Takeaways
- The board filed a plan on 6 September 2025 proposing a series of awards that could make Musk the first trillionaire.
- The package would deliver up to 12% of Tesla shares across 12 tranches over ten years, subject to strict milestones.
- Musk would receive 96 million restricted shares immediately, valued at about $31 billion, locked for five years.
- To collect the full award, Tesla must reach at least $8.5 trillion in market value by 2035; current market cap is just over $1 trillion.
- If implemented and retained, Musk’s stake could rise to roughly 25% of Tesla, up from 13% (plus 6.7% currently in dispute).
- The board says the plan is designed to prevent Musk from departing and to retain AI and robotics talent that might follow him.
Verified Facts
The compensation proposal, filed with the U.S. Securities and Exchange Commission on 6 September 2025, structures awards in 12 separate packages payable over ten years if Tesla meets stated benchmarks for market value, share price, operating profit and production targets. The filing names the package “A Super Ambitious Incentive Package for a Pioneering, Ambitious and Unique CEO.”
The filing states Musk would be awarded 96 million restricted shares immediately; the company reported that those shares are worth more than $31 billion and would be subject to a five-year sale restriction. The document also notes past disputes and says Musk has at times threatened to leave the company, prompting the board to seek stronger retention measures.
Under the plan’s most ambitious scenario, Tesla must reach a market capitalization of at least $8.5 trillion by 2035 for Musk to unlock all awards. Tesla’s market capitalization at the time of the filing was slightly above $1 trillion. Achieving the targets would require sustained, rapid growth in vehicle production, margins and potentially new revenue streams such as AI and robotics.
The proposal is scheduled for a shareholder vote in November 2025. The company’s existing governance disputes include litigation tied to a 2018 $56 billion pay award, which remains a backdrop to investor scrutiny over executive compensation.
Context & Impact
Corporate governance experts and investors are divided. Supporters argue the package aligns long-term incentives with major strategic shifts toward autonomy, AI and robotics. Critics warn the size and structure could set a precedent for outsized executive rewards and concentrate control.
Market implications would be substantial if the plan increases Musk’s stake to roughly 25%. That concentration of ownership could affect board dynamics, takeover defenses and strategic decision-making. It could also influence recruiting for Tesla’s AI and engineering teams, especially if employees view Musk’s leadership as critical.
- For shareholders: a large issuance of equity over time could dilute existing holders unless offset by growth.
- For regulators and courts: the plan may invite renewed scrutiny given prior legal fights over compensation.
- For rival automakers and tech firms: an intensified focus on AI and robotics at Tesla could accelerate industry competition.
“Musk also raised the possibility that he may pursue his other interests and leave Tesla if he did not receive such assurance.”
Tesla board filing (SEC)
Unconfirmed
- Whether shareholders will approve the plan in November 2025 (vote outcome pending).
- How external factors—macroeconomic conditions, regulatory actions or litigation—might alter Tesla’s ability to meet the 2035 market-cap target.
- Exact future dilution effects depending on which tranches vest and how Tesla finances them.
Bottom Line
The board’s proposal is aimed at securing Elon Musk’s continued leadership and talent retention by tying an unprecedented potential payout to ambitious growth milestones. Approval would reshape ownership stakes and raise questions about governance, but actual payouts hinge on steep targets that require exceptional performance.