Elon Musk: Tesla offers its CEO up to a trillion US dollar

The Board of Directors of Tesla attracts company boss Elon Musk with an unprecedented remuneration package. The billionaire and richest people in the world waves up to a trillion dollar when Tesla achieves his ambitious goals, as the US electric car maker announced on Friday. If the plan is approved, it would be by far the highest remuneration package, which has been awarded to a manager. The goals are likely to be bound primarily to growth in products with artificial intelligence (AI) and autonomous systems.

The project illustrates the dependence of the car company on his boss, while the demand for electric cars slowed down and the competition from Chinese competitors such as BYD increases. Conventional remuneration packages for managers of other companies are not suitable for the design of Musk’s performance -related remuneration, it was said in a message to the stock market supervision. The entrepreneur, born in South Africa, had made Tesla the most valuable car manufacturer in the world from a niche provider.

The proposed plan would award Musk up to twelve percent of Tesla shares. This would correspond to a value of around $ 1.03 trillion when the company reaches its goal of a market capitalization of $ 8.6 trillion. To do this, the value of Teslas would have to be increased by around $ 7.5 trillion or almost eight times over the next ten years. The payment is to be made in tranches that are linked to the reaching of milestones in market capitalization and in mass production of robotaxis and humanoid robots. As with previous agreements, Musk would not receive a salary or bar bonus.

If all goals are achieved, Musk’s share of voting rights would increase significantly from around 13 percent. This would fuel the debate about corporate management and succession planning. Musk had repeatedly stated that he needed greater participation in the company to promote his AI strategy.

The new proposal is in the shadow of a legal dispute over an earlier remuneration package from 2018 worth $ 56 billion at that time. A court in the US state of Delaware declared this package invalid. Tesla then moved his seat to Texas and appealed against the judgment. The new package is around 18 times as high as the contested. At the beginning of the year, the board of directors had already approved a transition package worth around $ 29 billion in order to keep Musk at the top until at least 2030.

Critics warn of a possible dilution of the shares and risks for corporate management. “In the past, Mr. Musk has shown that he can easily distract himself to other ways that do not necessarily benefit a company like Tesla,” said Peter Anderson, founder of Andersen Capital Management. The shareholders should vote in November on the new plan, which was examined by a special committee of independent directors.

The Tesla share increased by around two percent in pre-exchangeable trade.