When Tesla’s board unveiled its latest executive compensation plan for CEO Elon Musk on Friday, it wasn’t just another line in a proxy filing. It was an act of theater—and defiance. After two previous pay deals for Musk—the world’s richest man, worth hundreds of billions—had been alternately dismantled under legal and shareholder pressure, and then heavily criticized, the company is once again pushing the boundaries of corporate governance with a headline-grabbing target: Musk will earn only if Tesla’s valuation surges by at least a factor of eight over the next decade.
Tesla told shareholders in the filing with the Securities and Exchange Commission that Musk’s most recent pay package worth $29 billion was accompanied by the statement that “work was ongoing” by the special committee evaluating Musk’s compensation. The board—with Elon and his brother, Kimbal, recusing themselves from the process—unanimously recommended a “longer-term CEO compensation strategy” that could reach $1 trillion.
The special committee then confirmed what Fortune’s Amanda Gerut reported: that the $29 billion package was not directly linked to performance, and that this was quite the opposite. “Yes, you read that correctly,” the committee told shareholders. “In 2018, Elon had to grow Tesla by billions; in 2025, he has to grow Tesla by trillions — to be exact, he must create nearly $7.5 trillion in value for shareholders for him to receive the full award.” The committee also said that this award “uniquely challenges” Musk to guide Tesla through a new phase of unprecedented growth, while keeping him in leadership for many years to come.
