SAN FRANCISCO — In a move that could redefine corporate executive compensation, Tesla's board of directors has unveiled a new, massive pay package for CEO Elon Musk. The proposed plan, if approved, could be valued at up to $1 trillion, making it the largest compensation deal in U.S. corporate history. This bold offer comes as the company seeks to motivate Musk to achieve a series of ambitious, long-term performance milestones.

The details of the plan were disclosed in a proxy statement filed with the U.S. Securities and Exchange Commission (SEC) on Friday, October 5th. Titled the "2025 CEO Performance Award," the proposal would grant Musk 423,743,904 shares of Tesla's common stock, equivalent to 12% of the company's total outstanding shares. These shares would be awarded in 12 tranches through 2035, contingent on the company's performance.

If fully vested, this award would increase Musk's ownership stake in Tesla from its current 13% to 25%. CNBC analysis estimates the maximum value of this compensation package at approximately $975 billion (around 1,353 trillion Korean won), assuming the current number of Tesla shares remains constant.

To unlock this monumental payout, Musk would have to guide Tesla to a series of escalating market capitalization and operational targets. The first milestone is achieving a market cap of $2 trillion, followed by subsequent increases, with the final target set at a staggering $8.5 trillion. Tesla's current market capitalization is just over $1.1 trillion.

The compensation plan is tied not just to market valuation but also to a range of operational achievements. These include:

Vehicle Deliveries: 20 million units
FSD (Full Self-Driving) Subscriptions: 10 million
Robot Deliveries: 1 million
Commercial Operation of Robotaxis: 1 million
Adjusted EBITDA: $400 billion

A special committee of the board, responsible for evaluating CEO compensation, stated that it had held multiple meetings with Musk to negotiate the package and discuss his vision and ongoing role in Tesla's future. Robyn Denholm, Tesla's Chair, emphasized the strategic importance of the proposal. "Keeping Elon at the company and keeping him motivated is fundamental to Tesla achieving these goals and becoming the most valuable company in history," she stated.

The new compensation plan will be put to a vote at the company's annual shareholder meeting on November 6th and requires shareholder approval to be enacted.

This new proposal comes after a Delaware court ruling invalidated Musk's previous 2018 compensation package. That package, which included 304 million stock options, was structured in 12 tranches tied to performance milestones. However, a lawsuit filed by a small shareholder led the court to rule against the plan in December, citing a lack of independence on the part of the Tesla board.

Tesla has appealed that decision, with the Delaware Supreme Court scheduled to hear arguments from both sides on October 15th. In anticipation of a potential second loss in court, Tesla's board had previously indicated last month that it planned to offer Musk an alternative compensation package to partially replace the 2018 plan.

In response to the news, Tesla's stock price saw an increase of over 3% on the New York Stock Exchange. The outcome of the upcoming shareholder vote will be a critical indicator of investor confidence and a major turning point for both Tesla and the future of corporate leadership compensation.

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