Elon Musk is poised for a significant financial milestone that could elevate him to the status of the world’s first trillionaire, contingent on shareholder approval of Tesla’s proposed new compensation plan at the upcoming annual meeting in Austin, Texas. The plan is outlined in the company’s proxy statement and hinges on Musk achieving ambitious performance milestones designed to increase Tesla’s value to over $8 trillion.
The proposed compensation package, named the 2025 CEO Performance Award, lays out a series of rigorous goals for Musk. To secure a potential $1 trillion in compensation, Musk would need to significantly boost Tesla’s market capitalization to $8.5 trillion by 2035, with specified increments leading up to that goal. The milestones include achieving a $2 trillion market cap initially, with further increments of $500 billion thereafter, alongside ambitious product development targets. These involve delivering 20 million electric vehicles, establishing 10 million active full self-driving subscriptions, producing 1 million humanoid robots, and rolling out 1 million robo-taxis for commercial use. Additionally, Musk must ensure Tesla achieves $400 billion in earnings over four consecutive quarters. The company’s performance in the last quarter of 2025 saw earnings of $4.2 billion, a decline from the previous year.
This new compensation package is especially pertinent given the challenges Musk has faced with a previous 2018 plan, which has been invalidated by a Delaware court, with appeals still ongoing. The company aims to guarantee that Musk receives compensation regardless of the outcome of these legal proceedings, which is one reason shareholders will also consider an alternative route to compensate him about $56 billion owed from the earlier plan.
The board has emphasized that failing to approve the new compensation plan could risk losing Musk as CEO. Tesla Board Chair Robyn Denholm highlighted that Musk has not received meaningful compensation for eight years due to ongoing legal battles and pointed out the remarkable growth in market capitalization attributed to Musk under the previous agreement, which amounted to a $735 billion increase.
As the vote approaches, reactions have been mixed among shareholders. Some investment firms, including Schwab investment funds, had initially planned to vote against the proposal following recommendations from advisory group Glass Lewis, but later shifted their stance, stating support for the plan aligns the interests of management and shareholders. Conversely, Norges Bank Investment Management, Tesla’s seventh-largest shareholder, has expressed concerns regarding the overall size of the compensation and the associated risk factors, indicating they would oppose the package.
Musk, as the largest shareholder with over 500 million Tesla shares, technically holds the power to vote in favor of his own pay. Critics of this arrangement raise concerns about governance and accountability within the company as the conflict of interest is apparent.
Moreover, Tesla’s recent move to establish its corporate headquarters in Texas echoes Musk’s frustration with legal challenges in Delaware, where the company faced hurdles from a single dissenting shareholder in the past. This relocation, part of a broader trend dubbed #DExit among businesses disillusioned with Delaware’s corporate legal landscape, underscores Musk’s considerable influence on corporate governance practices.
The outcome of the shareholders’ meeting and the votes on the compensation plan not only have implications for Musk’s financial future but could also set precedents concerning executive compensation and corporate structure within influential companies like Tesla.
