Tesla has put forward a remarkable pay package for CEO Elon Musk that could make it the largest executive compensation deal in corporate history if all performance goals are met.
How the package works
The award is entirely performance-based and would be paid only in Tesla stock, not cash or salary.
It is divided into 12 separate tranches. Each tranche equals roughly 1% of the company’s shares and only vests if Tesla hits both market valuation and operational targets.
Shareholders officially approved the plan in November 2025, with a strong majority voting “yes” at the annual meeting.
Ambitious targets Musk must hit
To unlock the full compensation over the next decade, Tesla would need to meet extremely ambitious milestones, including:
Expand Tesla’s market capitalization from roughly $1.5 trillion today to about $8.5 trillion.
Deliver 20 million vehicles cumulatively over the period.
Deploy 1 million self-driving robotaxis into commercial service.
Produce or deliver 1 million Optimus humanoid robots.
Reach an adjusted EBITDA of about $400 billion.
Achieve 10 million active Full Self-Driving (FSD) subscriptions.
Musk must also remain with Tesla for at least 7½–10 years for the shares to vest.
Until these performance goals are met, Musk doesn’t receive a penny from the package.
Why this matters
If Musk hits every target, the payout — paid in Tesla stock — could total nearly $1 trillion, dwarfing any previous executive compensation deal.
The plan is designed to keep Musk focused on Tesla’s long-term growth, particularly in areas like robotics and autonomous driving, where competition is fierce.
Shareholders and proxy advisors were divided — some supporting the incentive as critical for Musk’s continued leadership, others criticizing its size and governance risks.
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