Musk Could Become 1st Trillionaire with Tesla Pay Deal

Tesla is promising to award Elon Musk a $1tn payday if he makes the electric car aker the most valuable company of all time.

The company unveiled a new pay award scheme on Friday that will hand him hundreds of millions of shares if he can hit a string of ambitious milestones, including making Tesla worth $8.5tn over the next decade.

By 2035, Musk would also have to have sold 1m AI robots and have 1m self-driving robotaxis on the road.

The deal would multiply Musk’s existing $378bn net worth, which already makes him the world’s richest person by a wide margin, and make him the world’s first trillionaire.

Tesla is currently worth just over $1tn.

The ambitious pay package would award Musk 12 tranches of shares for hitting a series of market value and business landmarks.

The first would be reached when Tesla hits a market capitalisation of $2tn, while he would also have to reach one of a series of other goals, such as the robotaxi or robot target, selling 20m Tesla vehicles, or posting annual profits of $50bn.

He would then receive further payouts, equal to 1pc of the company’s shares, for hitting escalating objectives up to an $8.5tn valuation.

This is more than double the market capitalisation of Nvidia, the world’s most valuable company.

To hit the final levels of the payout, Musk would have to hit all targets and be involved in planning for his successor. He would be 64 at the end of the 10-year period.

Musk, 54, doesn’t receive a salary or bonus, meaning that if he fails to achieve the lowest rung of the scheme – doubling Tesla’s value – he would receive nothing.

The pay award is unprecedented and far higher than a similarly structured $56bn pay scheme in 2018, which itself was the biggest ever.

At the time, the targets were seen as close to impossible, but Musk achieved them several years early.

Last year, a judge struck down that pay award, leaving Tesla in a legal battle to have it restored.

“Simply put, retaining and incentivising Elon is fundamental to Tesla achieving these goals and becoming the most valuable company in history,” Robyn Denholm, Tesla’s chairman, said in a letter to shareholders.

Investors will have to approve the award.