The possibility of Elon Musk becoming the world’s first trillionaire is linked to a massive, performance-based compensation package recently approved by Tesla shareholders.

Here are the full details of the plan and the requirements:

The Compensation Plan and Trillionaire Path

• Shareholder Approval: Tesla shareholders voted to approve an unprecedented stock-based pay package for CEO Elon Musk. More than 75% of voters backed the plan during the company’s annual meeting.
• The Potential Payout: The plan grants Musk new shares that could be worth up to $1 trillion if he achieves a set of extremely ambitious company goals over the next decade.
• Increased Ownership: If he receives the full payout, his ownership stake in Tesla could increase from around 12% to over 25% or nearly 30%.

Key Targets and Milestones

Musk will only receive the full compensation by hitting several difficult financial and operational milestones. These goals are divided into tranches, and the most significant targets include:

1. Market Capitalization: Tesla’s market value must reach $8.5 trillion (a nearly sixfold increase from its current valuation of approximately $1.1 trillion). The milestones for this target are broken down into a dozen tranches, with the first requiring a $2 trillion market value.
2. Vehicle Production: Delivering 20 million Tesla electric vehicles within 10 years.
3. Product Launches/Deployment:
   • Deploying 1 million robotaxis in commercial service.
   • Overseeing the delivery of 1 million Optimus humanoid robots.
   • Achieving 10 million active full self-driving subscriptions.
4. Financial Goals: Significantly increasing the company’s operating profits, including a goal of $400 billion in actual earnings for four consecutive quarters.
5. Retention: Musk must remain vested in the company for at least seven and a half years and help establish a long-term succession plan.

Context and Controversy

• Incentive for Retention: The pay package is designed to incentivize Musk to stay at the company for the next decade and focus on his vision of transforming Tesla into a leader in Artificial Intelligence (AI), robotics, and autonomy, far beyond just electric vehicles.
• Musk’s Threat: Musk had hinted that he might pursue other interests if the compensation plan was not approved, stating he wanted a stronger influence over the company’s future, especially regarding the development of the “robot army.”
• Opposition: The plan faced opposition from major investors and proxy advisory firms, who argued that the package was excessive, created potential dilution of shares, and cited concerns over “key person risk.”
• Immediate Payout: Even if he does not meet every single target, intermediate goals could still award him billions of dollars in new shares. For example, he could receive a significant payout if he raises the company’s market value by 80%, doubles vehicle sales, and triples operating profit.