In brief
The Tesla board has suggested a $1 trillion pay plan for Elon Musk, conditional on achieving aggressive growth targets, including boosting the company's value eightfold, selling millions of cars and AI robots, and improving performance metrics. While the proposal aims to incentivize Musk's leadership for Tesla's future, critics question its justification given current challenges. It follows a tumultuous period for Musk, marked by a recent payout cancellation and ongoing scrutiny over the company’s performance amidst falling sales.
Tesla boss Elon Musk will receive a pay package worth over $1 trillion (£740 billion) if he hits a list of ambitious targets over the next decade, the board of the electric car firm has proposed.
To get the package, Musk, who is already the world's richest person, would need to boost Tesla's value eightfold, sell a million artificial intelligence robots, sell another 12 million Tesla cars, and hit several other moonshot goals.
Musk would not earn a salary or bonus but would instead be gradually awarded shares which would be worth $1 trillion if he achieves all the targets. The company's board urged investors to vote in favour of the package.
Growth that may seem impossible today can be unlocked with new ideas, better technology, and greater innovation, Tesla chair Robyn Denholm said. Simply put, retaining and incentivising Elon is fundamental to Tesla achieving these goals and becoming the most valuable company in history. She added that the share award would drive peak performance from our visionary leader.
Under the latest plan, Musk would be awarded shares in 12 tranches, tied to 12 market milestones. The first milestone is for Tesla's market value to double to $2 trillion, with the final market value milestone set at $8.5 trillion - more than double the value of chip giant Nvidia, the world's most valuable company. He must also hit an operational milestone alongside each market milestone, which include the robot and vehicle targets, and a goal to increase one of Tesla's earnings figures 24-fold.
According to Tesla's latest financial report, sales are falling at their fastest rate in a decade, an issue which some experts have attributed to Musk's toxic reputation. Investment analyst Dan Coatsworth described the proposed pay award as beggars belief, questioning if one person is worth such a sum considering Tesla's current challenges.
The board's unprecedented pay proposal comes just months after it was forced to deny reports that it was looking to replace Musk. Critics argue that Musk should be fighting to improve Tesla's fortunes rather than being offered such substantial rewards amidst declining sales.
