It’s official: Elon Musk is on observe to change into the world’s first trillionaire.
Tesla shareholders permitted a brand new government pay package deal Thursday afternoon that might give Musk almost $1 trillion in inventory over the subsequent decade, a record-shattering deal for the world’s richest man.
The whole award is dependent upon whether or not Musk can meet formidable efficiency targets for the struggling electric-vehicle firm, together with rising Tesla’s market cap to $8.5 trillion—a greater than 500% enhance from right now’s valuation. The objectives additionally embrace supply of 20 million Tesla autos and 1 million bots along with 1 million robotaxis in business operation.
“Whereas we imagine Elon is the one individual able to main Tesla at this important inflection level, altering the world is neither an in a single day course of nor the work of a single individual,” Tesla’s Board wrote in a letter to shareholders in August. “So, we additionally need your assist in securing the staff and technique wanted to realize objectives that others will understand as unattainable however that we all know are doable for Tesla.”
Musk’s internet price is estimated at about $473 billion.
Reining Musk again in
If all goes to plan, Musk’s stake in Tesla will rise from about 13% to almost 29%—a stage of management he’s lengthy sought.
Having voting management within the “mid-20s” p.c vary would assist safe a “robust affect,” however provides shareholders sufficient management to fireplace him if he goes “insane,” Musk mentioned throughout Tesla’s earnings name final month.
“It’s known as compensation, however it’s not like I’m going to go spend the cash,” Musk added. “It’s simply, if we construct this robotic military, do I’ve not less than a powerful affect over that robotic military, not present management, however a powerful affect? That’s what it comes all the way down to in a nutshell. I don’t really feel snug wielding that robotic military if I don’t have not less than a powerful affect.”
Tesla’s inventory fell as a lot as 43% between January and March as Musk devoted a lot of his time to main the Division of Authorities Effectivity (DOGE). Since stepping again, shares have recovered to being up 16% year-to-date.
Many shareholders hope the brand new incentives will maintain Musk targeted on Tesla.
Ron Baron, the founder and CEO of Baron Capital, which holds a 0.39% stake in Tesla, mentioned in a put up on X that he supported the plan as a result of with out Musk, Tesla wouldn’t exist.
“Elon is the last word ‘key man’ of key man threat,” Baron wrote. “With out his relentless drive and uncompromising requirements, there could be no Tesla.”
From Pope Leo to Norway’s sovereign wealth fund, Musk’s pay package deal had its haters
Not each Tesla investor was on board with the extravagant deal.
Glass Lewis and ISS, two proxy advisory companies, urged Tesla shareholders to vote in opposition to the proposal, with the latter group citing “unmitigated considerations” with its magnitude and design. Musk then fired again throughout Tesla’s October earnings name, calling them “company terrorists.”
In the meantime, Norges Financial institution Funding Administration, the group behind Norway’s $2 trillion sovereign wealth fund which holds a 1.14% stake in Tesla, mentioned it voted in opposition to the pay package deal.
“Whereas we respect the numerous worth created underneath Mr. Musk’s visionary function, we’re involved concerning the whole dimension of the award, dilution, and lack of mitigation of key individual threat — according to our views on government compensation,” the group mentioned in a press release this week.
Pope Leo XIV, although not a Tesla investor, additionally just lately expressed his concern for the message despatched by Musk turning into a trillionaire—and the rising divide between the wealthy and the poor.
“CEOs that 60 years in the past might need been making 4 to 6 instances greater than what the employees are receiving, the final determine I noticed, it’s 600 instances greater than what common employees are receiving,” the pontiff informed Catholic information website Crux in an interview launched in September.
“Yesterday, the information that Elon Musk goes to be the primary trillionaire on this planet: What does that imply and what’s that about? If that’s the solely factor that has worth anymore, then we’re in large bother.”
A current report from Oxfam discovered that the ten richest Individuals—which embrace Musk in addition to Oracle cofounder Larry Ellison, Amazon cofounder Jeff Bezos, and Meta CEO Mark Zuckerberg—gained $69.8 billion over the previous yr. That’s 833,631 instances greater than what the everyday American family takes house.
Whereas Musk nonetheless trails John D. Rockefeller’s $630 billion inflation-adjusted fortune, hitting his new efficiency targets may make him the richest individual in fashionable historical past.
