In a move that has sent shockwaves through the corporate world and ignited fierce debates among investors, Tesla’s board of directors has unveiled a staggering compensation package for CEO Elon Musk, potentially worth up to $1 trillion. Announced in early September 2025, the proposal aims to lock in Musk’s leadership for the next decade, tying his rewards to ambitious milestones that could catapult the electric vehicle giant to unprecedented heights. If fully realized, this plan would not only dwarf any executive pay package in history but also reshape Tesla’s governance, strategy, and shareholder dynamics. As the company prepares for a pivotal shareholder vote on November 6, 2025, the proposal has drawn both admiration for its bold vision and sharp criticism for its perceived excessiveness and risks.

The origins of this monumental offer trace back to Musk’s complex relationship with Tesla’s compensation structure. Musk, who has long eschewed a traditional salary in favor of performance-based incentives, previously made headlines with his 2018 compensation plan. That package, valued at around $56 billion at its peak, granted him options to buy Tesla stock if the company achieved escalating market capitalization and operational targets. It was a high-stakes bet: Musk received nothing unless Tesla’s market cap surged from about $54 billion to $650 billion, alongside revenue and EBITDA goals. Remarkably, he unlocked all tranches by early 2023, as Tesla’s valuation soared amid the EV boom. However, the plan faced legal turmoil. A Delaware court ruled it invalid twice, citing conflicts of interest and inadequate shareholder disclosure, leading to its rescission. Tesla appealed, and shareholders ratified it in a 2023 vote, but the saga underscored the tensions between Musk’s outsized influence and corporate governance norms.

Building on this foundation, the new 2025 proposal represents an evolution—and escalation—of that model. Structured as restricted stock units (RSUs) rather than options, it offers Musk up to 423.7 million shares, equivalent to about 12% of Tesla’s outstanding stock. These shares are divided into 12 equal tranches, each unlocking upon hitting paired market cap and operational milestones. Unlike the 2018 plan’s immediate vesting, this one introduces delayed gratification: shares earned in the first five years vest after 7.5 years from the grant date of September 3, 2025, while those from the latter half vest at the 10-year mark. Musk must remain as CEO or in an approved executive role throughout to claim them, with a mandatory five-year holding period post-vesting. This design, Tesla argues, ensures long-term alignment with shareholders, preventing short-term stock pumps and promoting sustained growth.

The milestones themselves are nothing short of audacious, reflecting Musk’s grand ambitions for Tesla beyond cars. Market cap targets start at $2 trillion—nearly double Tesla’s current $1.1 trillion valuation—and climb in $500 billion increments for the first 10 tranches, before jumping to $1 trillion steps for the final two, culminating at $8.5 trillion. Each must be “sustained,” meaning the average over 30 trading days and six months meets the threshold. Operational goals shift from the 2018 focus on revenue and EBITDA to product-centric achievements, emphasizing Tesla’s pivot toward AI, robotics, and autonomy. These include delivering 20 million vehicles cumulatively, achieving 10 million active paid Full Self-Driving (FSD) subscriptions averaged over three months, rolling out 1 million Optimus humanoid robots, and operating 1 million driverless robotaxis in commercial service over a similar period. EBITDA targets are equally lofty, ranging from $50 billion to $400 billion, with the highest requiring three non-overlapping annual periods of achievement. The last two tranches add a governance twist: a board-approved CEO succession plan, addressing concerns about Musk’s irreplaceability.

If all goals are met, Musk’s Tesla stake could balloon to 29%, granting him immense voting power—immediately upon earning tranches, even before vesting. The potential payout is eye-watering: at current stock prices around $334 per share, the full award equates to about $141 billion in gross value, but Tesla estimates a fair value of $87.8 billion accounting for probabilities and time. Combined with an interim award of 78 million shares granted in August 2025—worth $26.1 billion and designed to “focus and energize” Musk amid distractions—the total could approach $114 billion in fair value. However, if Tesla’s stock multiplies as envisioned, the real-world value could hit that $1 trillion mark, making Musk not just the richest person alive but a trillionaire tied to one company’s success.

Tesla’s board justifies this colossal incentive as essential to retaining Musk, whose “track record and vision” have transformed the company from a niche EV maker to a global powerhouse. They point to his past feats: under the 2018 plan, Tesla’s market cap exploded, delivering massive returns to shareholders. Without such motivation, board members warn, Musk might divert his energies elsewhere—to SpaceX, Neuralink, xAI, or even X (formerly Twitter), where he’s already shifted resources like Nvidia GPUs from Tesla. The proposal, they argue, aligns Musk’s interests with long-term value creation, fostering innovations in AI-driven products that could redefine transportation and labor. Tesla has mounted an aggressive campaign to sell the plan, including TV ads, social media blitzes, and employee testimonials highlighting how stock compensation has changed lives—though critics see this as manipulative, conflating worker benefits with Musk’s windfall.

Yet, the proposal has faced a barrage of opposition, underscoring deep divisions over Musk’s leadership and Tesla’s direction. Proxy advisory firm Institutional Shareholder Services (ISS) has urged shareholders to vote against it, labeling it the “largest-ever” pay plan and criticizing its “astronomical size” and design that could reward partial success with tens of billions. ISS argues it locks in excessive pay without sufficient accountability, potentially diluting shareholder value and limiting the board’s flexibility for future adjustments. They also recommend rejecting the ratification of the 2018 package—already voided by courts—and a nonbinding proposal to invest Tesla funds in Musk’s xAI, citing conflicts of interest. Other critics, including pension funds and analysts, echo these concerns, warning of share dilution (up to 12% without buybacks) and entrenching Musk despite recent underperformance: Tesla’s sales are dipping in key markets like Europe, profits are trending downward, and innovations like affordable EVs have been shelved.

Comparisons to the 2018 plan highlight the 2025 proposal’s inflated scale. While the earlier award required a $600 billion market cap increase, the new one demands $7.5 trillion—over 12 times more—amid a maturing EV market. Operational shifts from financial metrics to product goals introduce subjectivity; for instance, what constitutes “commercial operation” for robotaxis? The delayed vesting and succession requirements add safeguards absent in 2018, but the immediate voting rights accelerate Musk’s control, potentially shielding him from challenges. Governance watchdogs decry the board’s composition—filled with Musk allies like his brother Kimbal and longtime friends—as lacking independence, a factor in the 2018 legal defeats. Musk’s threats to withhold AI advancements unless granted 25% ownership further fuel accusations of coercion, turning the vote into a referendum on his indispensability.

Tesla has fired back aggressively, dismissing ISS as “disconnected from reality” and urging investors to ignore their “unfounded” advice. The company touts Musk’s unparalleled contributions, noting Tesla’s 39,000% shareholder returns under key board members like Ira Ehrenpreis, whom ISS also opposes for re-election. They frame the package as a “carrot” to keep Musk focused, especially as he juggles multiple ventures. Amid this, Tesla is bundling the vote with proposals to replenish employee stock reserves—60 million shares for 120,000 workers—potentially holding worker compensation “hostage” to Musk’s award, as some see it. The interim award already depleted prior reserves, drawing ire for prioritizing Musk.

As the November vote looms, the stakes couldn’t be higher. Approval could supercharge Tesla’s push into robotics and autonomy, potentially justifying the payout through explosive growth. Rejection might signal shareholder fatigue with Musk’s distractions—social media feuds, political lobbying against EV incentives, and resource diversions—that have coincided with stock volatility and operational setbacks. With Musk owning 16%, retail investors at 35%, and institutions holding the balance, the outcome hinges on whether faith in his genius outweighs concerns over equity and accountability. Win or lose, this $1 trillion gambit cements Musk’s status as corporate America’s most polarizing figure, where ambition meets audacity in the quest for the stars—and trillions.