Tesla’s Musk granted world’s largest pay deal of US$I trillion

But he must deliver on extraordinary key performance indicators as part of package

- Bhagyashree Garekar US Bureau Chief

Mr Elon Musk has secured the largest compensation package in history - approaching US$1 trillion (S$1.3 trillion) - by daring Tesla shareholders to sack him or vote to give him a pay hike.

The eye-popping package, approved in a thumping vote by Tesla shareholders on Nov 6, will mint the world’s first trillionaire.

But the money and bragging rights are not the point if you ask Mr Musk, 54, who was already the world’s richest man before his pay jump.

He says he needs to own enough shares in Tesla, an electric vehicle (EV) company he founded, to remain in the driving seat. He currently owns about 500 million shares, or about a15 per cent stake.

The proposition before the shareholders was that only a trillion-dollar package would keep Mr Musk interested enough to keep on achieving “impossible things” at Tesla, which is widely considered America’s most innovative company.

At their annual general meeting (AGM) at Tesla’s Gigafactory in Austin on Nov 6, over 75 per cent of shareholders voted in favour, with some reservations voiced by institutional holders. Texas’ corporate-friendly laws allow Mr Musk to vote on his own pay.

With that, he will eventually come to own over 25 per cent of Tesla’s stock, to be awarded in 12 batches - provided he delivers on some extraordinary key performance indicators.

The biggest target is that Tesla must reach a market capitalisation of US$8.5 trillion over a10-year period. Its current market valuation is about US$1.45 trillion - more than that of other leading US carmakers GM and Ford combined

The other targets he must meet are to raise Tesla’s earnings by 24 times to hit US$400 billion and sell 20 million EVs, 10 million autonomous driving subscriptions, and a million units of his humanoid robot Optimus.

Plus, have at least a million robotaxis in commercial operation.