Tesla board recommends record $1 trillion package for Musk

Tesla's board has proposed an unprecedented $1 trillion compensation plan for CEO Elon Musk, putting the spotlight on Musk's hold on the electric-vehicle maker as it looks to pivot into robotaxis and humanoid robots.

The proposed plan requires boosting Tesla's valuation nearly eightfold, or about $7.5 trillion, over the next decade, and if fully earned, the award would materially increase Musk's voting power from his roughly 13% stake, intensifying debate over governance and succession.

It also highlights Tesla's reliance on Musk as it faces slowing EV demand, rising competition from Chinese carmakers and pressure to deliver on its AI ambitions.

COMMENTS:

JAY WOODS, CHIEF GLOBAL STRATEGIST AT FREEDOM CAPITAL MARKETS

"Hitting these numbers is a very tall task, but if I were a shareholder, this is exciting as it gives him (Musk) the incentive to perform. The question now is can he come close to reaching some of these lofty metrics. If he does, then shareholders will be rewarded as well."

GADJO SEVILLA, SENIOR ANALYST AT EMARKETER

"Tesla's proposed compensation package would be the highest pay deal ever put together for a corporate executive and, while it is a milestone-based structure, it will still draw criticism for being excessive. The targets, including an 8x increase in market cap are ambitious and may not be attainable, especially given the market conditions for EVs and robotaxis in the near future."

"However, I see these goals as an attempt to ensure Musk's long-term focus. Keeping the eye on the ball at Tesla, ostensibly for the next 10 years as the proposal states, would quiet detractors and appease shareholders."

MARK MALEK, CHIEF INVESTMENT OFFICER AT MURIEL SIEBERT & CO

"Tesla remains a big mystery stock for me in general, overall."

"$1 trillion almost seems fake... Maybe on second look, an aggressive pay package, if you just ignore the number, the overall number itself, is not such a bad thing. And so maybe ultimately shareholders would embrace it."

"I can see why people say that Musk is a force to be reckoned with. I can see where you would even apply a bit of a premium. But at the end of the day, as far as I can tell, Tesla is still an auto manufacturer subject to the same constraints that Ford or GM would be."

DAVID WAGNER, HEAD OF EQUITY & PORTFOLIO MANAGER AT APTUS CAPITAL ADVISORS

"Shareholders and market participants may not always love what Elon does, but these award packages continue to show that Tesla believes that he is the key man on innovation and the biggest threat to the company is Elon leaving. "

BRIAN MULBERRY, SENIOR CLIENT PORTFOLIO MANAGER AT ZACKS INVESTMENT MANAGEMENT

"The metrics are eye-popping to say the least! Growing the valuation of the company to over $8 trillion in market cap, that would be 8 times the current value, in order to do that there needs to be substantial growth and continued profit margin expansion. Also, manufacturing targets and time horizons are built in as well.