Is Musk's Big Payday Make-or-Break for Tesla's Share Price?
How much is it worth rewarding Elon Musk if he manages to lift Tesla’s share price nearly sixfold over the next decade? Ahead of the company’s annual shareholder meeting on Thursday, November 6, Tesla’s (NASDAQ: TSLA) stock has already moved higher. The main issue on the agenda is CEO Elon Musk’s proposed compensation plan valued at up to $1 trillion.
It’s not simply a question of whether Musk receives the money — it’s about the concern that he might step away if shareholders reject the deal. Musk’s drive for control remains unwavering.
“My fundamental concern … if I go ahead and build this enormous robot army, can I just be ousted at some point in the future?”
The proposal doesn’t involve direct cash payments but consists of a stock-based package. Its full value depends entirely on Musk meeting several ambitious performance targets for Tesla. If he achieves them within ten years, Tesla’s market capitalization would reach approximately $8.5 trillion — more than five and a half times its current $1.5 trillion valuation.
Many shareholders argue that such an outcome would justify the compensation. Among the supporters is Ark Invest CEO Cathie Wood, who has projected a $2,600 price target for Tesla by 2029, closely aligning with the market cap goal.
However, not everyone is on board. Some major investors, including Norway’s sovereign wealth fund — which owns about 1.2% of Tesla — have voiced opposition to the deal, questioning both its scale and its precedent.
Author Summary
Elon Musk’s $1 trillion pay proposal divides investors, balancing between confidence in his leadership and concerns over excessive reward tied to Tesla’s future valuation.