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Investors in the electric car maker gathered this Thursday to decide on a substantial pay deal for CEO Elon Musk valued at around $1 trillion. Should it pass, this deal would demonstrate investor confidence that the tech magnate can lead the vehicle manufacturer into an age shaped by AI technology and advanced machinery. Should it fail, Tesla could potentially face the exit of a key figure who once made the company name equivalent with electric vehicles.

Record-Breaking Targets and Company Valuation

Upon reaching the formidable milestones specified in the pay package revealed at Tesla's shareholder gathering, he could become the world's first person with a trillion-dollar net worth. For this to happen, he must steer Tesla to a staggering $8.5 trillion in market capitalization, which is eight times its current valuation. Additionally, he will be obligated to deploy millions autonomous vehicles and bipedal machines, while maintaining the corporate profits in the hundreds of billions over the next decade.

Compensation Structure

The key aims of the pay package, divided into 12 tranches, outline a trajectory for Tesla to reach its massive valuation. Should targets be met, Musk would be eligible to realize gains on an additional 12% of the corporation's shares. To be eligible, he must maintain involvement with the corporation for at least 7.5 years. Furthermore, he is required to help develop a future leadership strategy for the business he has led for in excess of 20 years. The share grants offered by the new compensation plan, combined with shares assured in his 2018 package, would result in Musk with 25 percent equity of Tesla's stock. In early November, Tesla shares were valued close to its 52-week high, at around $450 per share.

Formidable Objectives

Over the course of a ten-year period, Musk will be required to produce 20 million EVs to buyers, distribute 10 million live FSD memberships, produce and launch 1 million bipedal machines, and launch 1 million robotaxis in paid operations.

Musk will additionally be obligated to elevate the firm to $400 billion in tangible revenue for four straight quarters. Tesla's actual earnings for the third quarter of 2025 were $4.2 billion, a 9% decrease from the previous year.

In November, Musk's net worth was valued at $460 billion, the highest in the world, according to market tracking.

Restoring a Invalidated Package

Investors are also reviewing a plan that would remunerate Musk after his 2018 compensation plan was overturned by a court in Delaware. The remuneration deal, valued at around $56 billion, was contested by a individual investor who won his case. The state court rejected Musk's pay package on multiple instances. If shareholders approve the arrangement in Thursday's vote, Musk is set to be paid the massive amount irrespective of whether Tesla and Musk win an appeal of the case.

After Musk's 2018 pay package was originally overturned, he moved Tesla's legal headquarters from Delaware to Texas. He followed suit with the rocket firm and additional corporate bases. In last year, according to Texas regulations, shareholders again voted to approve the pay package.

But Delaware's so-called "equity court" for a second time denied one of the largest CEO pay deals in recent times. In the wake of that unfavorable ruling, Musk took to social media to voice displeasure with the region and its "activist chief judge", perhaps sparking a number of company relocations that Delaware officials have attempted to staunch with regulatory measures.

In evaluating whether Musk had undue influence in being awarded that previous compensation plan, a respected academic expert commented that the judge noted that other "high-profile executives" like the Meta chief and Amazon's Jeff Bezos were not given this sort of performance-linked deals.