Of course, none of those deals are as eye-popping as the one Elon Musk just negotiated, which could make him the world’s first trillionaire. Tesla’s ambitious Memorandum of Understanding hinges on achieving significant production milestones over the next 10 years. The company’s set up to deploy a million Robotaxis and distribute a million humanoid robots. The new plan appears designed in part to counter significant and ongoing legal challenges to his prior pay — which is still in limbo.
Here’s what to watch in the Delaware judge’s recent blistering bad news for Musk. He’s rebuffed Musk’s $50 billion pay deal—yes, that’s billion with a B—not once, but twice. Chancellor Kathaleen McCormick also criticized the negotiations that eventually approved Musk’s compensation, calling them improper and unnecessary. Regardless of these losses, Musk’s third and largest pay-package received overwhelming shareholder support. More than 3 out of 4 of them voted to approve the settlement!
As of this writing, Musk’s net worth is about $504 billion, per Forbes. As long as he achieves the performance conditions in the new pact, he stands to receive nearly $900 billion. That’ll occur only if Tesla’s market value soars from its current $1.1 trillion to a mind-boggling $8.5 trillion. Right now, Musk’s ownership stake in Tesla is just over 13%, according to a Morgan Stanley analyst.
The daunting goals laid out in Musk’s pay scheme come as no surprise given his historic want (and need) for more ownership over Tesla. Musk was detailed as a “special government employee” throughout the Trump administration until May. His miscalculation has led to wildcat protests breaking out at Tesla showrooms across the globe. This part of his career has received a polarized response, with some, including watchdog organizations, worrying about the risks for conflicts of interest.
Norway’s $2 trillion sovereign wealth fund, one of Tesla’s largest shareholders, criticized Musk’s pay package as excessive. They’re concerned about its large scope and the danger that presents.
“While we appreciate the significant value created under Mr. Musk’s visionary role, we are concerned about the total size of the award, dilution, and lack of mitigation of key person risk consistent with our views on executive compensation.” – Norges Bank Investment Management
Yet for all these criticisms, Elon Musk continues to demonstrate extreme hubris in his leadership of Tesla. He expressed his belief that his control over the company ensures its positive trajectory while retaining enough accountability to prevent any mismanagement.
“As I mentioned before, I think my control of Tesla should be enough to ensure that it goes in a good direction, but not so much control that I can’t be thrown out if I go crazy.” – Elon Musk
Tesla’s own pronouncements underscore the significance of this critical juncture in the company’s brief but storied history. The company argues that the proposals created by its Special Committee and Board are central to guiding Tesla’s future.
“We are at a pivotal juncture in Tesla’s history, and the proposals the Special Committee has carefully designed and the Board has put forward will help determine Tesla’s future.” – Tesla’s website
