Why is Tesla offering Musk a $1 tn payday?

Tesla's board has proposed a compensation package for chief executive officer (CEO) Elon Musk that could be worth up to $1 trillion over the next decade, potentially making him the world's first trillionaire.

- 

The plan, disclosed in a regulatory filing on 5 September, is aimed at keeping Musk focused on Tesla. Central to the proposal is a valuation goal: propelling Tesla's market capitalization 7.7-fold from $1.1 trillion to $8.5 trillion within 10 years.

While five out of the 10 most valued US companies, including Tesla, have seen that level of growth in the past 10 years, none have done it from a trillion-dollar base. Nvidia, the current No. 1, is valued at around $4.16 trillion, up over 12 times in five years, driven by the artificial intelligence (AI) boom.

To unlock the full payout, Musk would need to meet certain milestones by 2035. These include delivering 20 million vehicles (cumulatively), putting I million robotaxis into service, deploying 1 million Optimus humanoid robots and generating $400 billion in adjusted Ebitda (earnings before interest, taxes, depreciation and amortization).