• Tesla's board proposes a record-breaking compensation package for CEO Elon Musk, potentially worth up to $1 trillion, to secure his leadership.
  • The ambitious plan is tied to aggressive performance benchmarks in AI, robotics, and autonomous vehicles, aiming for an eightfold increase in market cap to $8.6 trillion.
  • The proposal follows a legal setback in Delaware and comes amid internal dissent and a pivotal shareholder vote scheduled for November 6.

Tesla Inc.’s board is making an unprecedented bet on Chief Executive Officer Elon Musk, proposing a compensation package that could be worth up to $1 trillion to ensure he remains at the helm during what the company’s chair calls a “transformative” period focused on artificial intelligence, robotics, and autonomous driving.

The new performance award, which would only vest if Musk remains CEO for at least another 7½ years, is designed to align his incentives with the company’s most ambitious growth phase yet. It replaces a previous $56 billion package that was invalidated by a Delaware court earlier this year over concerns about board oversight. According to people familiar with the board's thinking, the structure includes a formal succession plan, directly addressing prior governance criticisms.

“This is about ensuring Elon is driving the company through its next chapter,” said one person close to the discussions, who asked not to be identified because the details are private. “The milestones are extraordinarily high because the opportunity is extraordinarily large.”

The board, led by Chair Robyn Denholm, is framing the package as essential for Tesla’s future. The company is targeting an operating profit surge from $17 billion in 2024 to $400 billion annually, a goal that hinges on the successful commercialization of technologies like robotaxis and humanoid robots that remain largely unproven at scale.

The proposal has already generated a mixed reaction. Tesla’s stock saw a modest uptick following the announcement, indicating some investor optimism. However, the plan also arrives amid notable internal dissent. A senior engineer recently departed and publicly criticized Musk’s leadership, suggesting it was negatively impacting the company’s mission and public trust.

The compensation package is contingent on Tesla achieving a market capitalization of $8.6 trillion, a figure that would dwarf its current valuation of approximately $1.1 trillion. For the full payout to be realized, the company would need to deliver an eightfold return for shareholders over the coming years.

A shareholder vote is scheduled for the company’s annual meeting on November 6, which will serve as a major referendum on Musk’s leadership and investor appetite for such a high-risk, high-reward structure. The company’s recent move to reincorporate in Texas adds another layer to the ongoing governance recalibration.

Tesla did not immediately respond to a request for further comment on the dissent or the specific financial mechanics of the new pay package. The proposal is being watched across corporate America as a potential precedent for executive compensation in high-growth, innovation-focused sectors.