Tesla's board is proposing a new compensation plan for Elon Musk that could grant him up to $1 trillion in stock over the next decade.
Structure of the New Compensation Plan
The new compensation plan is structured similarly to Musk’s 2018 package, which was based on performance milestones. Under this plan, Musk can earn stock if Tesla meets ambitious future targets.
Risks and Opportunities of the Proposal
This plan is not a guaranteed payoff. Musk will receive compensation only if specific performance milestones are reached, such as market cap growth and advancements in technology.
Shareholder Approval Required
Before the plan can go into effect, it must be approved by Tesla's shareholders. This could be controversial, given Musk's involvement in multiple projects including SpaceX and X (formerly Twitter). Attention will be focused on the upcoming shareholder meeting.
The plan to compensate Musk with up to $1 trillion raises important questions about corporate governance and executive compensation, and its fate rests in the hands of Tesla shareholders.
