Elon Musk, CEO of Tesla, stands to amass a billion dollars through a bonus payment slated for 2025 - provided specific rigorous conditions are met.
Tesla Announces Ambitious New Bonus Package for Elon Musk
Tesla's board has proposed a groundbreaking new bonus package for CEO Elon Musk, which could see him earning over a billion dollars in new Tesla shares if he meets extremely ambitious goals. The new package, divided into 12 tranches, is payable upon reaching intermediate goals.
The new bonus package is more valuable than the previous one, which was deemed invalid by a court. To receive the first tranche, Tesla's net income must reach at least 50 billion dollars over four consecutive quarters. This is part of five steps of increasing net income, with the final goal being a net income of 400 billion dollars within a year.
The new plan includes product milestones, with Tesla defining four product conditions for the package. These conditions include a total of 20 million vehicles delivered, 10 million active Full-Self-Driving (FSD) subscriptions, 1 million robots delivered, and 1 million commercial driverless taxis.
In addition to the operational goals, Musk must also increase Tesla's market capitalization from about $1.1 trillion to $8.5 trillion within ten years. This is the first value milestone for the new bonus package, with Tesla's market capitalization needing to increase from nearly 1.1 trillion dollars to at least 2 trillion dollars to secure the first tranche.
The new package also includes 12 market capitalization milestones, with each milestone increasing by 500 billion dollars. The last two milestones jump by 1 trillion dollars up to 8.5 trillion dollars. To secure the entire new bonus package, Tesla would need to be worth $8.5 trillion, more than double the current value of the world's most valuable company, Nvidia.
Musk currently owns 13.5 percent of all Tesla shares. With the new proposal, he could earn an additional 12 percent by 2035, resulting in him owning up to 24.8 percent of Tesla. This could potentially make him the world's first trillionaire even before the twelfth tranche, as his current wealth, including Tesla, SpaceX, and xAI, is already $368 billion, according to Bloomberg.
The new bonus package also includes the condition that Musk raises Tesla's annual operating profit to $400 billion, achieves 20 million cumulative vehicle sales, gains 10 million monthly FSD software subscribers, deploys 1 million Tesla Bots, and has 1 million Robotaxis in operation to receive the maximum number of shares under the 2025 CEO Performance Award package.
In early August, Tesla awarded Musk around 96 million new shares. With the new proposal, he could earn even more if he manages to meet these ambitious goals. The new bonus package is indeed a testament to Tesla's faith in Musk's leadership and the company's ambitious plans for the future.
