Now that Tesla stockholders have approved a plan to offer Elon Musk close to $1tn, the clock is ticking to make the company worth eight times more than it is today.
If Musk can grow Tesla to over $8tn in value for stockholders over the next decade, he will be well on his way to becoming the world’s first trillionaire.
More than 75% of shareholders voted in favor of the historic compensation plan during a vote at the company’s headquarters in Austin on Thursday. After the votes were in, Musk took the stage and danced after the news was announced.
“It’s not just a new chapter for Tesla,” Musk said. “It’s a new book.”
The package’s approval demonstrates shareholders’ confidence that the billionaire Musk can lead the car company into an era dominated by artificial intelligence and robotics. If denied, Tesla had risked possibly losing a leader who once made the company name synonymous with electric vehicles.
Musk’s status as the world’s first trillionaire, however, will depend on delivering the lofty milestones in the compensation plan. To do so, he’ll need to guide Tesla to $8.5tn in market capitalization, eight times what it’s worth today. He will also be required to deploy millions of autonomous vehicles and humanoid robots and sustain the company’s bottom line in the hundreds of billions over the next decade.
So where do Musk, and Tesla, go from here?
The path to $1tn
The major goals of the compensation plan lay out a path for Tesla to reach the enormous market capitalization.
The required milestones are separated into a dozen “tranches”, each with their own compounding goals. The first milestone, or tranche, requires reaching market capitalization of $2tn. The next nine each require an additional $500bn in growth until $8.5tn is reached by 2035. With each financial milestone also comes a product development requirement.
To earn an additional 12% of the company’s stocks over the next decade, Musk must also deliver 20m of Tesla’s electric vehicles to buyers, 10m active full self-driving subscriptions, 1m humanoid robots, and deploy 1m robotaxis in commercial service. He will also be expected to grow the company to $400bn in actual earnings for four consecutive quarters. Actual earnings for the third quarter of 2025 were $4.2bn, down 9% from the year prior.
At Thursday’s annual meeting, Musk described the Optimus robots, which have not yet gone into mass production, as the future of the company and of humanity. He reiterated a claim that it would be “the biggest product of all time”, and suggested they could be used in everything from healthcare to prisons.
Ultimately, Musk must grow Tesla’s market capitalization from about $1tn today to $8.5tn by 2035. He also has to be vested in the company for at least seven and a half years and help it develop a long-term succession plan. As he grows the company’s worth, so too will he grow the value of stocks, and therefore his own wealth.
In its proposal, the company noted that the milestones laid out “will be extraordinarily difficult and challenging for Tesla, and for Musk personally”. If these financial goals are met, it would mean Tesla would be worth nearly as much as Meta, Microsoft and Google’s parent Alphabet combined.
Some say Musk could still reap billions even if he doesn’t meet all of those milestones.
As of November, Musk’s net worth was $460bn, the highest in the world, according to Bloomberg’s Billionaire Index.
Tesla’s challenges, and a new corporate home
The vote is a resounding victory for Musk, showing investors still have faith in him even as Tesla struggles with plunging sales, market share and profits, in no small part due to Musk himself.
Car buyers fled the company as Musk has ventured into politics in the US and Europe and trafficked in conspiracy theories.
The vote came just three days after a report from Europe showing Tesla car sales plunged again last month, including a 50% decline in Germany.
Still, many Tesla investors consider Musk as a sort of miracle man capable of stunning business feats, such as when he pulled Tesla from the brink of bankruptcy a half-dozen years ago to turn it into one of the world’s most valuable companies.
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Over the years, Tesla has offered incentive-based compensation plans for its CEO, setting specific milestones in exchange for stock options.
The last compensation package set in 2018 was challenged by a single stockholder who held fewer than a dozen shares at the time he filed a lawsuit in Delaware’s court of chancery. He won his case, and the pay package was invalidated and rescinded.
In response, Musk railed against the court and pushed for Tesla to move its corporate home from the first state to Texas. Musk’s outspoken displeasure with Delaware court rulings has been said to have fueled #DExit, a trend in which other big-name companies such as DropBox and Meta in turn threatened to move their corporate homes from Delaware.
“Elon Musk has a tremendous gravitational force, and that even extends to corporate law,” said Professor Eric Talley of Columbia Law School. Delaware’s title as the “mecca of corporations” went largely unchallenged, he said, “until 2024, when Elon Musk tried to rally the troops”.
Courting a ‘superstar CEO’
The Tesla board chair, Robyn Denholm, had publicly warned that a no vote on the 2025 compensation plan this week could mean losing Musk as CEO.
In a note to shareholders signed by Denholm and board member Kathleen Wilson-Thompson, they said Musk “has not received meaningful compensation for eight years” due to the legal battles over the 2018 compensation plan.
On Thursday, shareholders also approved a plan to compensate Musk for the pay package that was invalidated by a Delaware judge twice. The new incentive packages, added to his existing stake in the company, means he will ultimately own more than 25% of Tesla’s stock if he’s able to meet all of those milestones. As of 6 November, Tesla stock was trading close to its 52-week high, at about $450 a share.
Musk’s CEO compensation exceeds the GDP of entire countries, including that of Ireland, Sweden, and Argentina. Critics of the package, including some investors, argued that awarding Musk concentrated power in one erratic leader and ignored the challenges the company has faced.
“This vote shows how far Tesla’s governance has drifted from accountability and respect for the rights of shareholders,” New York state comptroller Thomas DiNapoli said in a statement after the meeting. “The board has rewarded distraction and entrenched a CEO who answers to no one.”
Additional voting measures
Tesla shareholders on Thursday also supported the company’s proposals to elect three board members, approve 2024 executive compensation rates, and eliminate some “supermajority voting requirements.”
A series of other shareholder proposals, except on one advisory measure to possibly invest in xAI that will be further reviewed by the board, were rejected. That included a proposed child labor audit across Tesla’s supply chain, related to cobalt mining in the Democratic Republic of the Congo.
The Associated Press contributed reporting
