In this articleTSLA your favorite stocksCREATE FREE ACCOUNTwatch now4:4904:49Tesla poses new pay plan for Elon Musk that would expand his voting powerSquawk BoxTesla is asking investors to apve yet another outsized pay plan for CEO Elon Musk, according to a financial filing out Friday.The total package is worth $975 billion based on the maximum payout, assuming count remains.The posed plan for Musk, already the world's wealthiest individual, consists of 12 tranches of s to be granted if Tesla hits certain milestones over the next decade.
It would also give Musk increased voting power over the EV maker and aspiring robotics titan, which he has publicly demanded since early 2024.Tesla Chairwoman Robyn Denholm told CNBC's Andrew Ross Sorkin the plan was designed to keep the CEO "motivated and focused on dering for the company.""If he performs, if he hits the super ambitious milestones that are in the plan then he gets equity — it's 1% for each half a trillion dollars of market cap, plus operational milestones he has to hit in order to do that," Denholm said on CNBC's "Squawk Box."The full award would give Musk more than 423 million additional s.
He currently holds a 13% stake in the company.Stock Chart IconStock chart iconTesla one-day stock chart.Denholm confirmed that the Tesla CEO pay plan, if apved by holders, would not put any limit on where and how Musk spends his time or require him to spend any minimum number of hours per week on Tesla .To obtain the first award in the plan, Musk and Tesla would need to almost double their current market cap to reach $2 trillion.
The final benchmark is reaching an $8.5 trillion market cap.The operational milestones in the 2025 CEO Performance Award include: 20 million Tesla vehicles dered, 10 million active FSD Subscriptions, 1 million robots dered, 1 million Robotaxis in commercial operation and a series of adjusted EBITDA benchmarks.Musk said at Tesla's 2024 annual meeting that Optimus robots could make Tesla a $25 trillion company.
This week, he said roughly 80% of Tesla's value could eventually come from Optimus but offered no specifics.The board's pitch for a ten-year Musk pay plan comes as his attention remains divided across his other ventures, and the legal battle over his 2018 pay drags on.Musk's collection of companies includes aerospace and defense contractor SpaceX, drilling venture The Boring Company, health company Neuralink and the artificial intelligence venture xAI, which has merged with his social network, X.Tesla is in the midst of a multi-quarter sales slump due to its aging lineup, competition from Chinese automakers, and a consumer backlash to Musk's incendiary political rhetoric and involvement with the Trump administration.Tesla also said in the filing Friday that it will ask holders at the Nov.
6 meeting to vote on whether the company should invest in Musk's newest venture, xAI.Musk first floated the idea publicly with an informal poll on X last July, asking whether Tesla should invest $5 billion into xAI.Founded in early 2023 in Nevada, xAI merged with Musk's social network X earlier this year.
The company now operates a massive data center in Memphis, and plans to build out another facility there to help train and run its large language models and a chatbot called Grok.watch now12:3512:35Tesla Chair Denholm: New pay plan designed to keep Musk motivated & focused on dering for TeslaSquawk BoxPay plan controversyThe new pay posal for Musk comes after the Delaware Court of Chancery ruled last year that his 2018 pay plan was excessive, had been imperly granted by the Tesla board and must be rescinded.In that case, Tornetta v.
Musk, a judge found that the Tesla CEO had controlled pay negotiations at the automaker, and his board of directors failed to give holders information that they were legally entitled to before telling them they should vote to apve Musk's performance-based pay plan.The 2018 pay plan was worth $56 billion when it vested, and was the largest public executive compensation plan in U.S.
history.
the new posed pay plan, Tesla had to hit a series of benchmarks, both market cap related and operational, for Musk to get his options.The amount of compensation that Tesla had paid its directors, including Denholm, was a point of consideration for the judge in the Tornetta matter.
Denholm said in the trial that during her time on the Tesla board, she had received compensation worth $280 million, calling it "life-changing wealth."Musk, Denholm and other allies of the Tesla CEO have criticized the Delaware court's decision, and Tesla even moved its site of incorporation from Delaware to Texas in response to the verdict.Tesla attempted to "ratify" the 2018 CEO pay plan after Delaware Chancellor Kathaleen McCormick voided it, asking holders to vote to restore it in retrospect of her ruling.
McCormick said such a vote did not remedy the earlier blems and upheld her decision in December 2024.The case is now on appeal in Delaware.Read more CNBC news'I'm glad it's over.' Google CEO thanks Trump for antitrust 'resolution'OpenAI is building an AI jobs platform that could challenge Microsoft's LinkedInEx-Salesforce co-CEO Bret Taylor's Sierra is the $10 billion AI startupAtlassian agrees to acquire The Browser Co.
for $610 million