Tesla's board has proposed a compensation package for CEO Elon Musk worth approximately $975 billion. According to CNBC, the plan would grant Musk more than 423 million additional Tesla shares if the company meets ambitious performance targets over the next decade.

The proposal divides into 12 tranches of shares tied to specific milestones. Tesla must reach an $8.5 trillion market capitalization at the highest level. The company currently holds a market value of about $1.1 trillion. Operational targets include delivering 20 million vehicles, securing 10 million active self-driving subscriptions, and deploying 1 million commercial robotaxis.

Tesla Chairwoman Robyn Denholm confirmed the plan places no restrictions on how Musk spends his time. The CEO currently runs multiple companies including SpaceX, Neuralink, and artificial intelligence venture xAI. Shareholders will vote on the compensation package at Tesla's November 6 meeting.

Why This Compensation Package Matters

This pay plan would create the largest executive compensation package in corporate history. The proposed amount dwarfs typical CEO pay across major companies. AFL-CIO data shows S&P 500 CEOs earned an average of $18.9 million in total compensation during 2024.

The package comes as Tesla faces declining sales and increased competition from Chinese automakers. Tesla shares dropped 26% from their December 2024 peak following consumer backlash related to Musk's political activities. The company reported falling profits and revenue decreases for two consecutive quarters.

Musk already ranks as the world's wealthiest person with a net worth of $378 billion. The Tesla CEO currently owns 410 million company shares worth $139 billion. His previous $56 billion pay package from 2018 was struck down by Delaware courts as excessive and improperly granted.

Industry Impact and Executive Compensation Trends

The Tesla proposal arrives amid growing scrutiny of executive pay packages across corporate America. Boardroom Alpha reports that 97 CEOs received compensation exceeding $25 million in 2025, with shareholder support for such packages declining significantly.

Traditional financial institutions and technology companies face pressure to match compensation levels at firms offering massive pay packages. The benchmarking process often drives pay increases across entire industries as boards compare their executives to peers.

Corporate governance experts express concern about the precedent set by enormous compensation packages. These arrangements can dilute existing shareholder value through new share issuance. Investment firms increasingly evaluate CEO pay ratios as part of their investment decisions, with some avoiding companies that exceed specific thresholds.

The proposal also includes a shareholder vote on Tesla's potential investment in Musk's xAI company. This cross-investment between Musk's various ventures raises questions about conflicts of interest and corporate governance practices.

Further Reading

For deeper insights into global adoption trends, our Alternative Financial Systems Index tracks regulatory frameworks and adoption metrics across 50 countries. The index provides comprehensive analysis of how different jurisdictions approach corporate governance and executive compensation regulations.