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Tesla shareholders convened on Thursday to decide on a massive pay deal for Chief Executive Elon Musk worth approximately close to $1 trillion. Should it pass, this deal would showcase market faith that the tech magnate can steer the car company into an period dominated by AI technology and automation. Should it fail, Tesla could confront the exit of a visionary leader who previously established the brand synonymous with EVs.

Historic Milestones and Market Capitalization

Upon reaching the lofty targets detailed in the compensation plan revealed at Tesla's annual meeting, he could emerge as the world's first person with a trillion-dollar net worth. To reach this goal, he must guide Tesla to a astronomical $8.5 trillion in company worth, which is eight times its current valuation. Additionally, he will be required to roll out countless self-driving cars and advanced androids, while maintaining the financial performance in the hundreds of billions in the upcoming decade.

Payment Breakdown

The primary objectives of the remuneration structure, divided into twelve stages, chart a path for Tesla to reach its colossal market capitalization. If successful, Musk would be eligible to realize gains on an further 12% of the corporation's shares. To be eligible, he must remain vested with the corporation for no less than 7.5 years. Additionally, he must assist in creating a future leadership strategy for the enterprise he has managed for more than 20 years. The stock options offered by the new compensation plan, combined with shares guaranteed in his earlier deal, would grant Musk with a quarter stake of Tesla's shares. As of early November, Tesla equity was priced approaching its 52-week high, at around $450 each share.

Lofty Goals

Over the course of a ten-year period, Musk will be required to produce 20 million EVs to customers, market 10 million active full self-driving subscriptions, produce and launch 1 million advanced androids, and launch 1 million robotaxis in revenue-generating use.

Musk will furthermore be required to elevate the firm to $400 billion in actual earnings for four consecutive quarters. Tesla's tangible revenue for the July-September 2025 were $4.2 billion, a 9% decrease from the same period last year.

In November, Musk's net worth was valued at $460 billion, the leading in the globe, based on market tracking.

Reinstating a Rescinded Package

Shareholders are also evaluating a plan that would compensate Musk after his 2018 compensation plan was overturned by a judicial body in Delaware. The remuneration deal, valued at around $56 billion, was challenged by a single stockholder who succeeded legally. The state court rejected Musk's remuneration deal twice. Should investors pass the plan in Thursday's vote, Musk is likely to be paid the huge sum regardless of if Tesla and Musk succeed in appealing of the lawsuit.

After Musk's earlier remuneration deal was originally overturned, he transferred Tesla's corporate home from Delaware to Texas. He followed suit with his aerospace company and other business entities. In 2024, under Texas law, shareholders again approved the pay package.

But Delaware's known as "equity court" once again ruled against one of the biggest CEO payouts in modern history. Following that unfavorable ruling, Musk used online platforms to show frustration with the state and its "influential presiding justice", possibly igniting a number of company relocations that Delaware legislators have tried to stop with legislation.

In considering whether Musk had undue influence in being given that earlier remuneration deal, a noted law professor remarked that the court recognized that other "superstar CEOs" like Facebook's founder and the Amazon founder were not awarded this kind of performance-linked deals.