Tesla Outlines $1 Trillion Compensation Plan for Elon Musk

As of September 6, 2025, Tesla has outlined a groundbreaking $1 trillion compensation plan for its CEO, Elon Musk. The ambitious scheme aims to incentivize Musk to significantly grow the electric vehicle company's market capitalization from its current $1.1 trillion to a staggering $8.5 trillion over the next decade.

The plan involves granting Musk up to 423.7 million performance-based restricted shares, which equates to around 12% of Tesla's current outstanding shares. These shares will be divided into 12 equal tranches, each tied to specific market capitalization and operational milestones. The market cap targets start at $2 trillion and increase by $500 billion increments, culminating in two $1 trillion milestones.

To earn the shares, Musk must not only meet these lofty market value goals but also achieve a range of operational objectives, such as rolling out robotaxis and robots, and raising Tesla's adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) profits. The plan also includes product-specific targets, including delivering 20 million Tesla vehicles, 10 million paid Full Self-Driving subscriptions, and 1 million "Bots" (AI robots like Optimus).

The compensation scheme is designed to closely align Musk's interests with those of Tesla's shareholders, as he will only be able to vote on the awarded shares after they vest, which occurs 7.5 or 10 years after the program's start in September 2025. If any of the goals are not met by the end of the 10-year period, the associated awards will be forfeited.