The plan would grant Musk up to 12% of additional company shares should Tesla achieve specific performance milestones outlined in a filing with the US Securities and Exchange Commission.
The announcement comes amid recent sales challenges that analysts attribute partly to Musk’s embrace of far-right politicians, which has sparked criticism among some consumers.
Tesla shares rallied following the announcement as investors responded positively to the direct linkage between Musk’s potential compensation and long-term shareholder performance.
The company is currently challenging a Delaware court ruling that struck down a 2018 package valued at about $55.8 billion for Musk.
They emphasized that Musk’s singular vision is vital to navigating this critical inflection point while setting additional conditions including one million robotaxis in commercial operation and one million AI bots.
Adverse public perception of the 2025 CEO Performance Award, even if it is baseless or satisfactorily addressed, may result in negative publicity for Tesla, which could materially and adversely affect our business, results of operations or financial condition, the filing stated.
The compensation package involves 12 milestones related to market capitalization, with the first tranche requiring Tesla to reach $2 trillion in market value and subsequent increases at $500 billion intervals.
CFRA analyst Garrett Nelson expects shareholders to approve the package during the November 6 annual meeting in Austin, noting that investors like the fact that the pay package aligns with shareholder interests.
These challenges stem partly from Musk’s political activities and the sluggish rollout of new models after the polarizing Cybertruck achieved poor sales performance.
Tesla shares rose 2.5 percent following the announcement as markets digested the ambitious proposal that could potentially make Musk the highest-compensated executive in corporate history. – AFP
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