Introduction to Elon Musk’s Potential $1tn Pay Package
Elon Musk could be on his way to a $1tn (£761bn) pay package if Tesla hits a series of extremely ambitious targets over the next 10 years. The world’s richest man has the potential to become a trillionaire after controversial plans were approved by 75% of the company’s shareholders. This would be the largest corporate pay package in history.
Requirements for the Pay Package
As part of the agreement, Musk will need to deliver 20 million Tesla vehicles in the next decade – more than twice as many as in the last 12 years. His job will be to dramatically increase the company’s valuation and operating profits. Another requirement is for Tesla to bring a million AI-powered robots to market – although not a single one has been launched yet. Musk also needs to develop a succession plan for who will replace him as CEO of Tesla.
How the Pay Package Works
As each step is successfully completed, Musk will receive additional shares in the company and his ownership stake will increase – potentially from the current 13% to almost 29%. And even if Musk misses some of these goals, he could end up making a lot of money. Figures suggest the 54-year-old already has a net worth of $493 billion (£375 billion) – and while that means he has more money than anyone else on the planet, he’s not the richest person in history… yet.
Why This Pay Package is Necessary
Now is the moment for Tesla to innovate, evolve into robotics and autonomous driving, and capitalize on the growth of artificial intelligence (AI). Tesla’s board of directors firmly believes that only Musk can make its lofty ambitions a reality. Some believe that there is no one like Musk. More shares in the company are "critical to keeping Musk at the top and guiding Tesla through the most critical time in the company’s history."
Opposition to the Pay Package
Not everyone is in favor of the wage package. Major investor advisory firm Institutional Shareholder Services (ISS) warned of a cut in the 10-year compensation agreement, citing concerns about the board’s ability to "meaningfully adjust future salary levels in the event of unforeseen events or changes in the company’s performance or strategic direction over the next decade." Musk has described ISS and another key adviser, Glass Lewis, as “corporate terrorists.” There was speculation that he would walk away from the deal if the package was not agreed upon.
