Tesla has proposed a new compensation deal for CEO Musk, with a potential value of about $1 trillion, an unprecedentedly huge compensation package in the history of American business.
The highly anticipated proposal, designed to incentivize Musk to continue leading Tesla for years to come, sets out a series of ambitious performance indicators that Musk must meet to receive full compensation, including expanding Tesla's self-driving taxi business and increasing the company's market value to at least $8.5 trillion from about $1 trillion currently. The program lasts for ten years.
Under the terms of Tesla's filing on Friday, the additional shares that Musk could acquire would bring his ownership stake in the electric car maker to at least 25%. Musk has publicly expressed his desire to acquire a stake of this size.
The plan offered Musk attractive financial benefits and expanded control of the company. A previous compensation package worth more than $50 billion that the world's richest man received in 2018 has been blocked by a Delaware court. While Tesla appeals the ruling, the board is seeking other ways to compensate its CEO, including granting stock awards worth about $30 billion in early August.
The incentives in the new plan are designed to allow Musk to focus on Tesla while driving the company's growth in emerging markets such as robotics and artificial intelligence. Friday's filing also included a non-binding shareholder proposal for Tesla to take a stake in Musk's startup xAI - an idea that Musk has previously discussed.