Tesla Motors (TSLA.US) CEO Elon Musk's proposed trillion-dollar compensation package has not been deemed "excessive" or "risky" by Tesla Motors' board of directors. Instead, it has received unanimous support, with the board believing that only Musk can lead the company through its next phase of disruptive transformation, making this substantial compensation package entirely reasonable and worthwhile.
Tesla Motors Board Chair Robin Denholm stated that this generous compensation plan "reserves" different roles that Musk might play within the automotive company, while Musk's political activities are "his own decision to make." She emphasized: "From a political perspective, his actions and motivations depend on personal choices... We live in a democracy where everyone has the freedom to express their views."
These remarks bring to mind the period when Musk was leading DOGE, during which Tesla Motors faced intense backlash from dealers, car owners, and individuals, causing the stock price to plummet nearly 50% at one point. However, Denholm denied that political positions would have long-term negative effects on Tesla Motors' stock price and firmly believes that "people will buy what they truly like, and Tesla Motors vehicles are exactly such products."
Despite Musk potentially expressing political views publicly, Tesla Motors' board still seeks to retain him through an unprecedented compensation package. If Musk can lead Tesla Motors to achieve a series of ambitious goals while maintaining continuous focus on company affairs, shareholders will vote in November 2025 to decide whether to grant him an additional 423 million Tesla Motors shares, approximately 12% of the current total outstanding shares. This would increase Musk's voting rights from the current 13% to approximately 25%.
To earn this massive reward, Musk must complete multiple operational targets: Tesla Motors' market capitalization needs to reach and maintain $2 trillion (current market cap is $1.3 trillion, requiring an additional $700 billion). For every additional $500 billion in market cap thereafter, another bonus can be unlocked, until the market cap reaches $8.5 trillion, completing all 12 bonus payments. Additionally, the company must deliver 20 million vehicles, achieve 20 million active Full Self-Driving subscription users, deliver 1 million Optimus robots, deploy 1 million autonomous robotaxis for commercial use, while meeting EBITDA targets, and Musk must remain in his position or be fully committed in another capacity for the next 7.5 to 10 years.
During compensation negotiations, Musk promised the board to gradually reduce his political activities and discussed succession plans. Denholm stated: "Tesla Motors is prepared for leadership succession," and Musk has engaged in succession negotiations with the board.
These statements boosted investor confidence, driving Tesla Motors' stock price to an 8-month high of $396.69, closing Friday with a 7.36% gain.