By Jane Lewis | Friday, October 10, 2025 | 4 min read
Tesla has announced a bold new compensation plan for CEO Elon Musk, asking shareholders to approve a performance-based pay package designed to tie his rewards to some of the company’s most ambitious goals yet. According to a financial filing released Friday, the proposal could grant Musk up to 12 tranches of stock if the company meets a series of aggressive market capitalization and operational milestones.
The move is widely seen as strategic. Musk’s previous $29 billion pay package, approved this year, has come under increasing scrutiny, with shareholders seeking legal redress over the scale of the award. By introducing a new plan, Tesla appears to be refocusing attention on future growth targets rather than past controversies.
Tesla Shareholder Approval for Ambitious Elon Musk Pay Package
If approved, the package could add more than 423 million shares to Musk’s holdings, significantly increasing his voting control within the company. Each tranche is linked to a mix of market cap benchmarks and operational achievements, including delivering 20 million vehicles, reaching 10 million Full Self-Driving subscriptions, and deploying 1 million robots and robotaxis.
Chairwoman Robyn Denholm said that the plan is designed to “keep Musk motivated and focused,” framing the proposal as a tool to align the CEO’s incentives with the company’s long-term success. The first milestone, she explained, requires Tesla’s market capitalization to nearly double to $2 trillion, with the final target an eye-popping $8.5 trillion. To put that into perspective, the current U.S. stock market as a whole is smaller than that figure, underscoring the audacious nature of company’s vision.
The timing of this proposal is also notable. In June, a Delaware court ruled that Musk’s 2018 compensation plan was excessive and improperly approved, a decision that Tesla is now appealing. That ruling called into question the board’s governance practices and raised broader concerns about executive pay at major U.S. companies. The new package can be seen as it’s effort to reset the conversation on executive compensation while emphasizing measurable performance targets rather than upfront guarantees.
Shareholders will also vote on Tesla’s proposed investment in Musk’s AI venture, xAI, at the company’s annual meeting on November 6. The vote comes amid growing interest in Tesla’s AI initiatives, from autonomous driving to robotics, positioning Musk at the center of both Tesla’s automotive ambitions and his broader technological vision.
Critics have expressed skepticism about the scale of the new plan. While performance-based packages are common among CEOs of major tech companies, the sheer size and reach of this proposal—if fully realized—would make it one of the largest executive compensation packages in corporate history. Some investors worry that tying pay so heavily to market cap could encourage short-term stock price manipulation, while others see it as a way to maintain Musk’s focus and ambition in a competitive global market.
Supporters argue that Musk’s track record justifies ambitious targets. Under his leadership, Tesla has become a dominant force in electric vehicles, expanded into energy storage and solar power, and pioneered self-driving technology. By structuring compensation around ambitious milestones, the company aims to incentivize Musk to continue pushing the boundaries of innovation while tying rewards directly to shareholder value.
Regardless of opinion, the proposal highlights the unusual scale and influence of Elon Musk’s role at Tesla. Few executives in corporate history have enjoyed such deep control over a public company, and this package would further cement his influence, reinforcing both his vision and his stake in the company’s future.
As the vote approaches, all eyes will be on Tesla’s board and shareholders to see whether they endorse another record-breaking compensation package. For now, the proposal signals that Musk and Tesla remain undaunted in their pursuit of ambitious growth, even as questions about governance, equity, and executive pay continue to swirl.
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