Elon Musk could reportedly pocket tens of billions from Tesla’s record pay plan even if he misses most performance targets.
Tesla’s board has pitched what it billed as a “Mars-shot” compensation scheme worth up to $878 billion in stock over 10 years—contingent on transforming Tesla through robotics, robotaxis, self-driving tech, and turbo-charged profit and valuation goals, the outlet reported.
But an article by Reuters says Musk, 54—who at the start of this month became the first person to hit a net worth of $500 billion—could still reap more than $50 billion by clearing a handful of comparatively easy milestones paired with market-value thresholds.
One pathway for the world’s richest man to become even richer, outlined by the outlet, suggests that averaging 1.2 million vehicle sales a year over the next decade, along with a rise in Tesla’s market value from roughly $1.4 trillion to $2 trillion, could net him about $8.2 billion in stock.
On Tuesday, Tesla rolled out lower-cost variants of the Model Y and Model 3 amid declining sales.
Three product goals at the heart of the plan are written with enough flexibility to trigger significant awards without necessarily boosting profits, six experts told Reuters.
One grants Musk 1 percent of Tesla stock if the company reaches 10 million subscriptions to its “Full Self-Driving” software—a system that does not mean a fully autonomous vehicle. There is no requirement to actually produce a self-driving vehicle.
Another grants 1 percent if Tesla has one million “robotaxis in commercial operation,” a definition experts say could include cars with remote operators or a human in the passenger seat.
A third awards 1 percent if Tesla produces one million “bots,” defined broadly as “any robot or other physical product with mobility using AI.”
Each of these product wins must be paired with valuation steps from $2 trillion to as high as $8.5 trillion, says Reuters.
By contrast, the hardest targets involve profit. Eight EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) milestones between $50 billion and $400 billion, compared with $16.6 billion in 2024.
Because each product or profit goal paired with a valuation step yields the same 1 percent stock tranche, Reuters says, Musk can still rack up huge awards even if those profit hurdles aren’t met, the outlet reported.
The report also highlighted investor pushback ahead of a November vote on the plan.
A Tesla board spokesperson told Reuters, “The proposed pay package is actually worth zero to our CEO unless and until the shareholders see the value of the company nearly double and an operational milestone is met.”
Musk has said on X that the package is about ensuring he has sufficient influence over Tesla “if we build millions of robots.”
The board’s proposal also requires him to remain an executive for at least seven-and-a-half years to collect stock, though voting rights attach as soon as an award is earned.
Supporters, including investor Gene Munster, argue markets will punish Musk if he doesn’t deliver “transformational products.”
Morningstar’s Seth Goldstein told Reuters that Tesla’s valuation could top $3 trillion over a decade on market-average returns—but the largest payouts still require “real products.”
The Daily Beast has contacted Tesla for comment.
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