Tesla Proposes $1 Trillion Deal to Deploy Musk’s Robot Army
▼ Summary
– Tesla’s board has proposed a new pay package for Elon Musk that could make him the world’s first trillionaire if shareholders approve it.
– To receive the compensation, Musk must meet milestones including producing 1 million robotaxis and 1 million humanoid robots while increasing Tesla’s valuation by trillions.
– This proposal follows a Delaware court voiding Musk’s previous $50 billion pay package in 2018, which Tesla has appealed to the state’s Supreme Court.
– The board argues Musk’s leadership is essential for Tesla to become a leader in AI and robotics, despite recent sales declines and brand damage from his political statements.
– Musk would need to remain CEO for 7-10 years to secure the full payout and has expressed wanting more control over Tesla’s direction while remaining accountable to shareholders.
Tesla’s board has put forward a staggering new compensation proposal for CEO Elon Musk, a package that could potentially elevate him to become the world’s first trillionaire. The deal, valued at nearly $1 trillion based on maximum payout, hinges on Musk achieving a series of ambitious technological and financial milestones over the coming years.
Under the terms of the proposed agreement, Musk would need to oversee the commercial deployment of one million robotaxis and one million humanoid robots, all while dramatically increasing Tesla’s market valuation. This would not only solidify his status as the planet’s wealthiest individual but also grant him greater influence over the company’s strategic direction, something he has repeatedly stated is necessary to advance his vision for AI and automation.
This latest proposal follows a contentious legal battle over a previous compensation package. In 2018, Tesla shareholders approved an award worth more than $50 billion for Musk, but a Delaware court invalidated the deal last year, citing flaws in the approval process and concerns over shareholder fairness. Tesla has since appealed that ruling, and now seeks fresh approval for this even larger incentive plan.
Board Chair Robyn Denholm defended the proposal in a letter to shareholders, emphasizing that Musk’s “singular vision” is essential as Tesla positions itself at the forefront of AI and robotics. She described the company’s current phase as a “critical inflection point,” arguing that Musk’s leadership is indispensable for navigating the challenges ahead.
The timing of this proposal is notable. Tesla has recently faced slumping sales worldwide, driven by intensifying competition, particularly from Chinese automakers, and reputational damage linked to Musk’s increasingly vocal political engagements. Despite these headwinds, Tesla’s stock has often traded at a premium to its operational performance, leading some analysts to categorize it alongside meme stocks driven more by sentiment than fundamentals.
To qualify for the full compensation, Musk must remain as CEO for a minimum of seven years, extending to a full decade to receive the entire award. During that period, he is expected to create nearly $7.5 trillion in value for shareholders while hitting production targets for both autonomous vehicles and Optimus robots. Both Musk and his brother Kimbal, who sit on Tesla’s board, recused themselves from the proposal’s approval process.
Tesla’s recent stumbles have left some investors uneasy. The company’s much-hyped robotaxi service launched in Austin this summer but failed to meet earlier promises, and the Cybertruck, Tesla’s first new consumer vehicle since 2020, has been widely criticized. Meanwhile, Musk has expressed a desire for increased voting control to safeguard the company’s trajectory, stating in a recent earnings call that he seeks “enough influence to steer Tesla in a good direction, but not so much that I can’t be removed if necessary.”
(Source: The Verge)
