SAN FRANCISCO, USA — Tesla’s board has put forward an unprecedented pay package for chief executive Elon Musk that could be worth over $1tn (£740bn), provided he hits a series of ambitious targets over the next decade.
The proposed compensation is not a salary or bonus but would instead be paid in shares awarded in 12 tranches. For Musk to unlock the full value, he must achieve a series of “moonshot” goals, including boosting Tesla’s market value eightfold, selling a million artificial intelligence robots, and selling 12 million more cars.
“Growth that may seem impossible today can be unlocked with new ideas, better technology and greater innovation,” said Tesla chair Robyn Denholm, who urged investors to vote in favour of the plan. She added that the share award would “drive peak performance from our visionary leader” and that retaining and incentivising Musk was “fundamental to Tesla achieving these goals and becoming the most valuable company in history.”
The proposal comes months after Musk was awarded a $29bn share package after his original $50bn award was struck down by a US court for being “unfair to shareholders.”
Under the new plan, the first milestone requires Tesla’s market value to double to $2tn. The final market value milestone is an extraordinary $8.5tn—more than double the value of chip giant Nvidia, the world’s most valuable company.
Dan Coatsworth, an investment analyst at AJ Bell, described the proposed pay as something that “beggars belief,” asking, “Is one person worth that much?” He argued that Musk “presides over a company that has lost its edge, is being overtaken by rivals, and whose brand has been tarnished by Musk’s actions outside of Tesla.”
The board’s proposal follows a period of speculation about Musk’s future. The Wall Street Journal reported in May that the board was looking to replace him due to his focus on other ventures, a claim Tesla has denied as “absolutely false.” Mr. Coatsworth noted the contradiction, saying, “One minute Tesla’s board is wondering if Elon Musk is a liability to the company…the next they’re effectively saying ‘pick a number, any number’ to lock him in.”
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