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Investors in the electric car maker assembled this Thursday to decide on a substantial pay deal for CEO Elon Musk estimated at nearly $1 trillion. Should it pass, this deal would demonstrate market faith that the billionaire can guide the vehicle manufacturer into an age defined by machine learning and robotics. Should it fail, Tesla could risk the exit of a key figure who historically built the brand interchangeable with EVs.

Historic Targets and Company Valuation

If the CEO meets the lofty targets outlined in the compensation plan introduced at Tesla's shareholder gathering, he could become the pioneering trillionaire. To accomplish this, he must lead Tesla to a astronomical $8.5 trillion in market capitalization, which is 800% of its current valuation. Furthermore, he will be required to launch countless driverless automobiles and humanoid robots, while maintaining the financial performance in the hundreds of billions in the upcoming decade.

Compensation Structure

The key aims of the compensation plan, split into 12 tranches, outline a trajectory for Tesla to reach its colossal worth. Should targets be met, Musk would be in a position to realize gains on an additional 12% of the corporation's shares. To be eligible, he must maintain involvement with the corporation for at least 7.5 years. Furthermore, he is required to contribute to forming a future leadership strategy for the enterprise he has headed for over 20 years. The stock options awarded by the updated remuneration deal, in addition to shares assured in his earlier deal, would leave Musk with a quarter stake of Tesla's stock. In early November, Tesla equity was priced near its annual peak, at around $450 per stock.

Formidable Objectives

During a ten years, Musk will be tasked to deliver 20 million zero-emission cars to consumers, distribute 10 million operational autonomous driving plans, develop and sell 1 million advanced androids, and introduce 1 million robotaxis in paid operations.

Musk will furthermore be required to bring the firm to $400 billion in tangible revenue for a full year. Tesla's tangible revenue for the July-September 2025 were $4.2 billion, down 9% from the same period last year.

By November, Musk's fortune was valued at $460 billion, the highest in the world, as reported by market tracking.

Restoring a Invalidated Package

Stockholders are also reviewing a proposal that would remunerate Musk after his earlier remuneration deal was overturned by a judicial body in Delaware. The compensation package, valued at around $56 billion, was contested by a sole shareholder who won his case. The state court denied Musk's remuneration deal twice. Upon stockholder approval the plan in Thursday's vote, Musk is likely to be awarded the substantial payout irrespective of whether Tesla and Musk win an appeal of the case.

After Musk's 2018 pay package was initially invalidated, he moved Tesla's corporate home to Texas from Delaware. He followed suit with the rocket firm and other companies' headquarters. In last year, per Texas statutes, shareholders for a second time passed the compensation plan.

But Delaware's so-called "equity court" for a second time denied one of the biggest CEO payouts in modern history. After that unfavorable ruling, Musk posted on his accounts to express dissatisfaction with the jurisdiction and its "influential presiding justice", possibly sparking a series of corporate exits that Delaware lawmakers have tried to stop with new laws.

In reviewing whether Musk had improper sway in being granted that previous compensation plan, a prominent legal scholar commented that the judicial authority acknowledged that other "high-profile executives" like the Meta chief and Amazon's Jeff Bezos were not granted this sort of goal-oriented agreements.