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Elon Musk could become the world\u2019s first trillionaire if he hits targets set by Tesla, under a scheme disclosed by the electric car company he runs and in which he is the largest shareholder.<\/p>\n
Tesla outlined the terms of the incentive package, unprecedented in corporate history, in a section of its latest stock market update that began: \u201cYes, you read that correctly.\u201d<\/p>\n
Musk, the company said, will have to increase the value of Tesla from just over $1tn now to $8.5tn over 10 years.<\/p>\n
If he presides over growth on that scale, the 54-year-old will receive new shares that would push his stake in the company from nearly 16% to well beyond 25%, increasing the fortunes of the world\u2019s richest man to more than $2tn.<\/p>\n
Estimates of Musk\u2019s current net worth vary but a live ranking of the world\u2019s wealthiest people on the planet, compiled by Forbes, estimates the South African-born tycoon\u2019s fortune at $430.9bn. In second place, with $272.3bn, is the investor and Oracle co-founder Larry Ellison.<\/p>\n
The incentive plan, revealed in a filing to the US Securities and Exchange Commission on Friday, comes at a time when some observers have questioned whether Musk\u2019s outspoken political views could be holding Tesla back.<\/p>\n
The carmaker\u2019s European sales fell by 40% earlier this year, a dramatic slump that some analysts attributed to Musk\u2019s vocal support for far-right political parties, and his intense but short-lived alliance with Donald Trump.<\/p>\n
Musk has also divided his duties between Tesla and the stewardship of other ventures, such as SpaceX, Neuralink, xAI and the Boring Co, on top of the time he spends posting on social media platform X, formerly known as Twitter, which he bought for $44bn in 2022.<\/p>\n
\u201cOne minute Tesla\u2019s board is wondering if Elon Musk is a liability to the company given his outspoken views and political distractions, the next they\u2019re effectively saying \u2018pick a number, any number\u2019 to lock him in for as long as possible,\u201d said Dan Coatsworth, an investment analyst at the London-based stockbroker AJ Bell.<\/p>\n
He said the pay package \u201cbeggars belief\u201d, questioning whether one person could be worth that much.<\/p>\n
But in its statement to shareholders, signed by directors Robyn Denholm and Kathleen Wilson-Thompson, Tesla offered Musk an outspoken vote of confidence, describing him as its \u201cvisionary leader\u201d.<\/p>\n
The company also referred investors, a majority of whom must support the pay deal for it to go through, to the difficulty it has previously had in securing incentives for Musk.<\/p>\n
The filing referred to a legal challenge that has prevented it from following through on a pay deal announced in 2018 that gave Musk the chance to claim a $55.8bn bonus.<\/p>\n
A court ruled last year in favour of a group of investors who claimed that the scheme\u2019s targets had been inappropriately set. An appeal by Tesla is due to be heard next month.<\/p>\n
\u201cUltimately, the new award aims to build upon the success of the 2018 CEO performance award framework, which ensured that Elon was only paid for performance delivered and incentivised to guide Tesla through a period of meteoric growth,\u201d the company said.<\/p>\n
Tesla said the new plan included profit targets that were 28 times higher than the 2018 scheme and would also hinge on delivering new products, such as getting 1m \u201crobotaxis\u201d in operation and delivering 1m AI bots, humanoid robots that the company is developing.<\/p>\n
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Sign up to Business Today<\/span><\/p>\n Get set for the working day \u2013 we’ll point you to all the business news and analysis you need every morning<\/p>\n Privacy Notice: <\/strong>Newsletters may contain information about charities, online ads, and content funded by outside parties. If you do not have an account, we will create a guest account for you on theguardian.com to send you this newsletter. You can complete full registration at any time. For more information about how we use your data see our Privacy Policy. We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply.<\/span><\/p>\n after newsletter promotion<\/p>\n If Musk fails to double Tesla\u2019s valuation over the 10-year period, he will receive no pay award.<\/p>\n In an apparent justification of Musk\u2019s proposed pay package, Tesla said: \u201cIf Elon achieves all the performance milestones [\u2026] his leadership will propel Tesla to become the most valuable company in history.\u201d<\/p>\n Tesla said it \u201cbelieves that Mr Musk\u2019s vision and leadership are critical to nailing that execution\u201d.<\/p>\n The target stock market value of $8.5tn is more than double the current value of Nvidia, the chipmaker that is currently the world\u2019s most valuable company.<\/p>\n \u201cTesla is a public company, and shareholders will ultimately decide if he deserves a $1tn pay deal,\u201d Coatsworth said.<\/p>\n \u201cSecuring this money will be dependent on hitting targets, and current progress suggests Musk will need a stroke of extraordinarily good luck to grab the 13-digit figure.<\/p>\n \u201cShareholders would love for Musk to hit the targets to trigger the payday, as they would also share in the success via a higher share price. Therefore, it feels like many investors would happily approve it.<\/p>\n \u201cThe bigger question is whether this proposal sets a new precedent and boardrooms across America will think it\u2019s OK to add a zero or two on to the end of current remuneration packages. It all seems a tad excessive and a symptom of poor corporate governance.\u201d<\/p>\n Quick Guide<\/span><\/p>\n <\/span>Show<\/span><\/span><\/p>\n The best public interest journalism relies on first-hand accounts from people in the know.<\/p>\n If you have something to share on this subject you can contact the Business team confidentially using the following methods.<\/p>\n Secure Messaging in the Guardian app<\/strong><\/p>\n The Guardian app has a tool to send tips about stories. Messages are end to end encrypted and concealed within the routine activity that every Guardian mobile app performs. 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Tesla outlined the terms of the incentive package, unprecedented in corporate history, in a section of its latest stock market update<\/p>\n","protected":false},"author":1,"featured_media":19333,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[52],"tags":[91,1371,2276,4584,1040,1381,11844],"class_list":{"0":"post-19332","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-technology","8":"tag-elon","9":"tag-musk","10":"tag-offers","11":"tag-package","12":"tag-pay","13":"tag-tesla","14":"tag-trilliondollar"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/19332","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=19332"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/19332\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/19333"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=19332"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=19332"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=19332"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Contact Guardian Business about this story<\/h4>\n