Elon Musk can get a new salary agreement worth $ 1000 billion – around NOK 8,000 billion – from Tesla.
This happens after the company moved its legal headquarters from Delaware to Texas last year.
A Delaware judge rejected the former Musk’s previous salary agreement of $ 56 billion as “unthinkable” and unfair to the shareholders, Reuters reports.
The new wage package is almost 20 times larger than the previous one, but has better chances of being approved thanks to Texas’ corporate law.
An important difference is that Musk this time is allowed to use its voting rights of 13.5 per cent of the shares when the shareholders vote on the wage package. In 2018, he was refused to vote to make it more difficult for investors to sue.
In May, Texas introduced a new law that requires shareholders to own at least three percent of the shares before they can sue the company. Tesla Introduced this rule quickly. Musk is the only single shareholder to meet the requirement.
“They are completely protected from shareholder lawsuits in Texas,” Ann Lipton, professor at the University of Colorado Law School, told Reuters.
In Delaware, anyone can sue, and many lawsuits come from investors with small ownership interests.
To get the package, Musk, which is already the world’s richest person, must increase Tesla’s value eight times, sell a million artificial intelligence robots and sell another 12 million Tesla cars.
Musk will not receive a salary or bonus, but instead gradually be awarded shares that will be worth NOK 8,000 billion if he achieves all the goals.
-Growth that may seem impossible today can be unlocked with new ideas, better technology and larger innovation, says Tesla Chairman Robyn Denholm.
She adds that the stock award will “drive top performance from our visionary leader”.
The first milestone is that Tesla’s market value will double to $ 2000 billion. The last goal is a market value of $ 8500 billion.
Investment analyst Dan Coatsworth in AJ Bell says the proposed salary amount “defies any sense”.
– Is one person worth so much? he asks.
Coatsworth believes Musk “leads a company that has lost its advantage, is obtained by rivals, and whose brand has been damaged by Musk’s actions outside Tesla”.
The proposal comes months after the board had to disprove reports that they were considering replacing Musk.
Should Tesla reach the goal, the new shares would be worth almost a Billion dollar. That would make Tesla the most valuable company ever.
– It is a big salary agreement, but Tesla has to retain its biggest asset in Musk as top manager, says analyst Dan Ives to CNN.
Tesla warns in the documents that they have to motivate musk to focus on the company. During the negotiations, Musk must have mentioned that he could pursue other interests if he did not receive such guarantees.
Musk has previously said that he needs at least 25 percent control over the Tesla shares to feel confident in his position, CNN writes.
The Tesla share rose five percent on the news on Friday.
What are teh key performance milestones tied to Elon Musk’s 2018 Tesla compensation package?
Table of Contents
- 1. What are teh key performance milestones tied to Elon Musk’s 2018 Tesla compensation package?
- 2. Tesla’s proposed Wage Deal Could Make Musk the World’s First Trillionaire
- 3. The Compensation Package: A Deep Dive
- 4. How the Deal Works & Trillion-Dollar Projections
- 5. the Legal Battle & its Impact
- 6. Implications for Tesla & the EV Market
- 7. Beyond EVs: Musk’s Other ventures & Wealth Sources
- 8. The Debate Surrounding Executive Compensation
Tesla’s proposed Wage Deal Could Make Musk the World’s First Trillionaire
The Compensation Package: A Deep Dive
Elon Musk’s 2018 compensation package from Tesla, valued at a staggering $56 billion, is back in the headlines. A Delaware judge initially voided the package in January 2024, citing conflicts of interest and a lack of proper shareholder approval. However, on February 26, 2024, Tesla shareholders overwhelmingly voted to reinstate the plan. This re-approval, coupled with Tesla’s continued growth, is fueling projections that could see musk surpass the $1 trillion net worth mark.Understanding the details of this Tesla compensation plan is crucial to grasping the potential financial implications.
The Original Deal: The 2018 package was performance-based, tied to achieving specific operational and financial milestones. These included market capitalization and revenue targets.
Milestone Achievement: Tesla has demonstrably met these milestones, driving the value of the package to its current estimated worth.
Shareholder Ratification: The recent shareholder vote,with over 77% approval,effectively validates the original agreement and paves the way for Musk to perhaps claim the rewards.
How the Deal Works & Trillion-Dollar Projections
The core of the package revolves around stock options. As Tesla achieves pre-defined operational and financial goals, Musk receives tranches of stock options. These options allow him to purchase Tesla shares at a predetermined price, frequently enough significantly lower than the current market value. The difference between the market price and the option price represents Musk’s profit.
Several financial analysts are now predicting that, based on current stock performance and projected growth, Musk could become the world’s first trillionaire as a direct result of this compensation.
Bloomberg’s Billionaires Index: Bloomberg currently estimates Musk’s net worth at around $195 billion (as of September 6, 2025).
Projected Growth: If Tesla continues its trajectory, and Musk exercises his stock options, his net worth could realistically exceed $1 trillion within the next few years.
Key Growth Drivers: Electric vehicle demand, advancements in Tesla battery technology, and expansion into new markets like energy storage are all contributing factors.
the Legal Battle & its Impact
The initial challenge to the compensation package, led by Richard Tornetta, a Tesla shareholder, argued that the board of directors was too closely aligned with Musk and failed to adequately represent shareholder interests. The Delaware judge initially agreed,raising concerns about the process and potential conflicts of interest.
However, the subsequent shareholder vote demonstrated strong support for Musk and the package. This outcome highlights the notable influence Musk holds over Tesla investors and the belief in his leadership. The legal battle, while initially disruptive, ultimately solidified the deal through democratic shareholder action. This case set a precedent for executive compensation packages and shareholder rights.
Implications for Tesla & the EV Market
Musk’s potential trillion-dollar status isn’t just a personal milestone; it has broader implications for Tesla and the entire electric vehicle (EV) market.
Investor Confidence: A triumphant outcome for Musk reinforces investor confidence in Tesla’s long-term prospects.
Innovation Incentive: The massive compensation package serves as a powerful incentive for Musk to continue driving innovation and growth at Tesla.
Competitive Landscape: Tesla’s success, fueled by Musk’s vision, continues to pressure traditional automakers to accelerate thier EV development and adoption. the future of automotive is undeniably electric, and Tesla remains a dominant force.
Stock Performance: TSLA stock has been volatile, but the reinstatement of the compensation package is generally viewed as a positive catalyst.
Beyond EVs: Musk’s Other ventures & Wealth Sources
While Tesla is the primary driver of musk’s wealth, it’s critically important to remember his other significant ventures.
SpaceX: His space exploration company,SpaceX,is valued at over $150 billion and continues to secure lucrative contracts with NASA and other organizations.
X (formerly Twitter): Although X has faced challenges since Musk’s acquisition, it remains a significant asset.
Neuralink & the Boring Company: These ventures, while still in their early stages, represent potential future sources of wealth.
Diversification: Musk’s diversified portfolio mitigates risk and provides multiple avenues for wealth creation. this portfolio diversification strategy is a key element of his financial success.
The Debate Surrounding Executive Compensation
Musk’s compensation package has sparked a broader debate about the appropriate level of executive pay. Critics argue that such massive payouts exacerbate income inequality and are not aligned with the interests of all stakeholders. Supporters contend that such packages are necessary to attract and retain top talent and incentivize remarkable performance. The discussion around fair compensation and *income inequality
