“Given that Tesla’s stock price is basically all vibes and appears to have very little to do with the automaker’s actual performance, I suspect they will approve this package.”
The board said the new award could lift his stake significantly if all targets were met, giving him even greater control as Tesla seeks to become the world’s most valuable company.
Tesla has been losing ground to Chinese rival BYD.Credit: AP
The proposed plan would grant Musk up to 12 per cent of Tesla’s stock, worth about $US1.03 trillion if the company hits its target market value of $US8.6 trillion. The plan requires boosting Tesla’s valuation nearly eightfold, or about $US7.5 trillion, over the next decade.
If fully earned, the award would materially increase Musk’s voting power from his roughly 13 per cent stake, intensifying debate over governance and succession.
The board said the award would vest in tranches tied to both market capitalisation and operational milestones, such as mass production of robotaxis and humanoid robots.
Tesla emphasised that Musk would receive no salary or cash bonus, with all compensation linked to performance, echoing the structure of his 2018 plan.
The company’s shares were up about 4 per cent in early trading.
Tesla’s board earlier this year approved an interim compensation package for Musk worth about $US29 billion in restricted stock, designed to keep him at the helm through at least 2030 as the company pivots to an AI-first strategy.
Tesla has since reincorporated in Texas and is appealing the Delaware ruling over the 2018 package, but the company said the new plan reflects shareholder feedback and stronger governance safeguards.
The filing also disclosed that a special committee of independent directors reviewed the proposal, which will go to a shareholder vote in November.
Musk’s foray into party politics and his willingness to challenge President Donald Trump have heightened concerns among Tesla investors about potential distractions from the company’s core business.
Donald Trump and Elon Musk had a public falling out as the latter criticised the President over public spending.Credit: AP
In July, Elon Musk announced plans to launch a third political party, the “America Party,” following a public clash with Trump over a tax cut and government spending bill.
Trump dismissed the idea as “ridiculous,” warning that a third party would create chaos. Since then, Musk appears to have slowed the initiative, underscoring his unpredictable approach to politics.
Governance experts have said these moves reinforce long-standing worries about Musk’s unpredictability and the concentration of power in his hands.
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Tesla’s board has urged shareholders to vote against a proposal calling for a political neutrality policy, which would have expanded board oversight of Musk’s political activities.
Tesla shares hit a record high late last year after Trump returned to the Oval Office, as investors anticipated regulatory easing that could accelerate the rollout of robotaxis. However, the stock has since retreated from those highs amid Musk’s political spat with the president.
“It really seems like what Elon wants, Elon gets from the board and from his shareholders,” said Douglas Chia, president of Soundboard Governance, an independent corporate governance consulting firm. “As ridiculous as it is, they’ll pass it, I have no doubt.”
