NEW YORK: Tesla's board on Friday proposed a pay and "performance" package that could make CEO Elon Musk the globe's first trillionaire if the US electric vehicle maker meets required milestones under his leadership.
The plan, which runs for 10 years and must be approved by shareholders, provides for the granting of shares to Musk based on Tesla's market valuation, according to a filing with the US Securities and Exchange Commission.
The maximum number of shares he could receive corresponds to 12 per cent of the company's current number of shares, but is conditional on "stratospheric growth" and a market valuation of $8.5 trillion.
The company's current market capitalisation is around $1 trillion. Nvidia, currently the world's most valuable company, is worth around $4 trillion.
"The preliminary aggregate fair value estimate of the 2025 CEO Performance Award is $87.75 billion", the filing says, but that would swell to about $1 trillion if Musk hits all the performance targets and collects restricted shares.
In addition to growing the company's valuation, Musk would also need to meet certain product goals, including delivery of 20 million Tesla vehicles and having one million Robotaxis in commercial operation.
Earlier this month, Tesla announced an "interim" compensation award worth about $29 billion for Musk, asserting the need to retain the controversial CEO at a moment of fierce competition for top talent.
The developments come as Tesla challenges a Delaware court ruling that struck down a 2018 package for Musk of about $55.8 billion.
Already the world's richest person, Musk is viewed within the business world as a unique talent after his success with building Tesla and SpaceX into major global companies.
But his stewardship at Tesla has come under scrutiny in the last year as car sales and profits have tumbled.
This trend has been partly due to Musk's support for far-right political causes, but it is also related to a sluggish rollout of new auto models after the polarising Cybertruck sold poorly. — AFP
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