Tesla’s Board pushing the boundaries of Corporate Governance with unprecedented pay package for Musk
Tesla's board has proposed a $1 trillion compensation plan for CEO Elon Musk in what would be the largest corporate pay package in history, underscoring the hold Musk has over the carmaker as it attempts to transform into an AI and robotics powerhouse. The proposal highlights the board's confidence in Musk's ability to steer the company in a new direction while reigniting growth, even as it loses ground to Chinese rivals in key markets amid softening EV demand.
Tough that’s not the picture Tesla’s board of directors paints in the company’s annual proxy statement, where they revealed the proposed pay package. Instead, the board focuses on how it plans to create “the most valuable company in history.” To be sure, if Tesla accomplishes all that it aims for with this deal, it will look like a much different company at the end of the 10-year period it covers. That doesn’t change the fact that the milestones the company is asking Musk to aim for are less ambitious than his own previously-stated goals. While the unprecedented pay package still needs to be approved by shareholders at a meeting in November, it’s easy to see the company’s fervent fan base voting “yes.” Previous votes on Musk’s compensation have been overwhelmingly approved by Tesla’s shareholders. The total package contingent on Tesla achieving unprecedented targets in market capitalization, vehicle deliveries, and robotics deployment. The plan relies exclusively on Tesla stock and requires Musk to remain at the company for up to 10 years to receive the full payout.
