The Tesla board of directors is proposing a record compensation plan for CEO Elon Musk, linked to the company's stock valuation. Details below.
Unprecedented Stock Performance-Based Compensation Plan
Tesla has unveiled a compensation project that could allow Elon Musk to receive up to $1 trillion over ten years, provided the company’s capitalization reaches $8.5 trillion.
The mechanism is based on granting shares tied to the company’s valuation with intermediate thresholds. The first threshold is set at $2 trillion in capitalization.
Financial and Strategic Aspects
This compensation plan marks a significant departure from the previous 2018 program, which was valued at $56 billion. It was canceled in 2024 by Delaware courts. Tesla now relies on Musk to lead its transformation, emphasizing its strategic dependence on him.
Discussion on Governance and Risks
The announcement of the plan has prompted mixed reactions. Some see it as a way to align Musk's interests with Tesla's long-term performance. Critics, however, point to risks of shareholder dilution and Musk's growing political influence. If the plan goes through, his stake could rise to 25% of the capital, potentially increasing his dominance over the company.
The shareholders' vote scheduled for November will determine if this extraordinary plan will be implemented. Close attention should be paid to the progress of the process and Musk's statements.
