As of this writing, Elon Musk is on the brink of hitting a historic personal financial milestone. His pay package, newly proposed by Tesla, could put him on track to become the world’s first trillionaire. Musk still has to meet a number of performance milestones for the new electric vehicle maker. He will do all of this over the next 10 years, motivated by a unique pay structure. If successful, Musk’s net worth may reach astronomical heights. This would set the bar at truly remarkable compensation indeed, in a country already known for its extreme executive compensation.
Tesla recently revealed the outlines of Musk’s pay package, which deserves scrutiny on a number of levels given its stunning potential. To make that happen, Musk would have to increase Tesla’s market value to a staggering $8.5 trillion. Surprisingly, that target is almost double the present-day market cap of Nvidia, currently the globe’s most valuable firm. In other words, Musk will have to find a way to persuade investors that Tesla will deserve a $2 trillion value. If he does, he earns that first tranche of shares, starting with 1% of the company.
The ambitious nature of this pay package is reflective of Musk’s status as one of the most influential figures in the technology and automotive sectors. Of course, over the last year he’s spent plenty of time here in Washington. There, he established himself as an anti-environmental superstar during the Trump administration. The administration’s goal has been to significantly reduce the size of the U.S. government, and Musk’s involvement has placed him at the center of discussions around economic policy and corporate governance.
When details of Musk’s pay package first leaked, Tesla’s valuation spiked. Further illustrating these challenges, after the announcement, the company’s share price shot up over 5% in morning trading. Investors seem hopeful for the company’s fortunes still, even with the high bar set for Musk to reach his pay package. These milestones include a number of performance metrics that are aimed to launch Tesla into uncharted territory on the global stage.
All the Tesla controversies aside, Musk’s sheer determination and demonstrated past successes give strong evidence that he could do it. Yet, achieving them will prove no simple task.
New pay structure brings high expectations. This new pay structure does have increased expectations. It’s representative of both Musk’s unusual position atop the tech world and the high-flying hopes that go along with heading up a company like Tesla.
