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Tesla unveiled on Friday a proposed compensation package for Elon Musk that could top $1 trillion if the controversial CEO delivers on his vision for stratospheric growth from new technologies.
The plan, which runs for 10 years and must be approved by shareholders, provides Musk with up to 12 percent of current total shares, according to a filing with the US Securities and Exchange Commission.To reach the full award, Tesla must reach a market capitalization of “at least $8.5 trillion by 2035,” according to the filing.
Tesla’s current market capitalization is just over $1 trillion, down somewhat from its peak following recent weak earnings. Analysts have attributed some of the sales woes to Musk’s embrace of far-right politicians, which has sparked criticism.
But Musk has described Tesla’s potential growth as nearly boundless, saying in July that if the company delivers on its vision for autonomous driving and artificial intelligence, “Tesla will be the most valuable company in the world by far.”
Earlier this month, Tesla announced an “interim” compensation award worth about $29 billion for Musk, asserting the need to retain the controversial CEO at a moment of fierce competition for top talent.
The developments come as Tesla challenges a Delaware court ruling that struck down a 2018 package for Musk of about $55.8 billion.
Tesla Chair Robyn Denholm and board member Kathleen Wilson-Thompson described the new package as a “super ambitious incentive package for a pioneering, ambitious and unique CEO” in a letter to shareholders in the filing.
“We believe that Elon’s singular vision is vital to navigating this critical inflection point,” they said in the letter, which also set conditions of having one million robotaxis in commercial operation and one million AI bots.
“If Elon achieves all the performance milestones under this principle-based 2025 CEO Performance Award, his leadership will propel Tesla to become the most valuable company in history.” Vanguard
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