The richest man in the world, Elon Musk, known to steer SpaceX, Tesla, and xAI, has a net worth of about $400 billion. Now, Musk could also become the man to draw the highest salary. Tesla’s board of directors has put forward a new proposal that would give Musk a pay package of a whopping $1 trillion.
In a recent regulatory filing, the electric car maker said that it will hand over 12 per cent of shares to Musk in a dozen separate packages if he manages to meet the targets set by the company.
To get the full payout, Elon Musk will have to increase Tesla’s stock market value by eight times in the next decade. For those not in the know, this means that the world’s richest man will have to raise the company’s valuation from $1.1 trillion today to $8.5 trillion.
According to a report by the New York Times, Elon Musk would also have to remain the CEO of Tesla for at least seven and a half years to cash in any part of the shares and 10 full years to get the whole amount. To get one per cent of Tesla’s shares, which would also be his first package, Musk would have to prove to investors that the company is worth $2 trillion in the stock market, which is double what it is today.
But that’s not it. He would also have to meet numerous ambitious operational milestones like selling 20 million Tesla vehicles, which is almost triple what the company has sold since it was founded back in 2003. Musk will also need to sell at least one million robots and robotaxis, a business Tesla started a few months ago. The plan also includes a clause that Musk should draft a framework that will enable Tesla to choose his successor.
In a letter to shareholders, Robyn Denholm, a chair on the board and director Kathleen Wilson-Thompson, said that “retaining and incentivising Elon is fundamental to Tesla achieving these goals and becoming the most valuable company in history.” Even if Elon Musk manages to get 12 per cent of Tesla’s shares, he would not be able to allowed to sell any of them for years. However, the multi-billionaire will be eligible to exercise votes in shareholder meetings.
If approved by shareholders, the pay package will make Elon Musk the world’s first executive to get a trillion dollars. While the lavish pay might sound excessive to many, in the last few years, investors have been complaining that Musk has performed poorly as the CEO and damaged its reputation.
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While Tesla’s share price plunge was partly because of Musk’s political affiliation with the current US President Donald Trump, the car maker has also been facing stiff competition from other US automakers and some Chinese manufacturers like BYD.
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