- Tesla proposed a record-shattering pay package for Elon Musk that could be worth $1 trillion over time.
- Musk needs to meet goals like putting 1 million robotaxis on the road and take Tesla to an $8.5 trillion market cap.
- Another box he needs to check: helping plan for someone to take his place.
Tesla’s board thinks Elon Musk is so critical to the company’s future that it wants to pay him $1 trillion, a sum so mind-bendingly large that it might as well be $1 kajillion.
But the company also knows Musk won’t be around forever. (The billionaire has said he wants to “die on Mars.”) Hence, probably the most straightforward task baked into the enormous pay packaged that Tesla’s board announced on Friday. To unlock the last two tranches of stock awards, Musk needs to help pick a new CEO for Tesla.
“While the Board retains primary responsibility for succession planning and actively discusses and prepares contingency plans in the case of an unexpected departure, it is in Tesla’s best interests to also develop a framework for long-term succession to support smooth leadership and knowledge transition at some point in the future,” Tesla said in an SEC filing. “Musk’s input is critical to develop this framework, and the Committee believes that establishing this requirement to earn the full 2025 CEO Performance Award creates a strong incentive to accomplish this goal in furtherance of Tesla’s long-term stability.”
More specifically, Musk needs to develop a “framework for long-term CEO succession.”
The idea of a Tesla without Musk has long seemed unfathomable to some of the company’s fans and investors. He helped finance the company in its early days and has served as CEO since 2008. His big personality and knack for generating hype around AI and autonomous cars have helped launch Tesla’s stock in to the stratosphere.
But Tesla’s struggles as of late have called into question for many whether Musk is still the company’s savior, or more of an anchor dragging it down. His foray into right-wing politics and stint in the Trump administration ravaged Tesla’s brand reputation in the U.S. and abroad. And that’s had real consequences for sales. Analysts and shareholders criticized him for spending too much time at the White House instead of running Tesla.
Amid the fallout, The Wall Street Journal reported that Tesla’s board had started searching for Musk’s replacement, a claim the board denies. Now the board is putting its money where its mouth is, awarding Musk roughly $30 billion last month to keep him “motivated” for at least two years—and it’s upping the ante with by far the largest executive package in history.
Actually becoming the world’s first trillionaire comes with strings attached, though. To unlock up to 12 tranches of stock over the next decade, Musk needs to hit aggressive market cap, earnings and operational milestones.
Getting the whole shabang will require Tesla hitting an $8.5 trillion market cap (more than twice that of Nvidia, the world’s most valuable company today), $400 billion in annual earnings, 10 million Full Self-Driving subscriptions, 20 million Tesla cars delivered, 1 million Optimus robots sold and 1 million autonomous taxis in service.
So putting together a little Powerpoint about succession may be the least of Musk’s concerns.
Contact the author: Tim.Levin@InsideEVs.com
