Elon Musk could become the world’s 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.
Tesla outlined the terms of the incentive package, unprecedented in corporate history, in a section of its latest stock market update that began: “Yes, you read that correctly.”
Musk, the company said, will have to increase the value of the company from just over $1tn today to $8.5tn over 10 years.
If he presides over growth on that scale, the 54-year-old would receive new shares that would push his stake in the company from nearly 16% to well beyond 25%, increasing the fortunes of the world’s richest man to more than $2tn.
Estimates of Musk’s current net worth vary but a live ranking of the world’s wealthiest people on the planet, compiled by Forbes, estimates the South African-born tycoon’s fortune at $430.9bn. In second place, with $272.3bn, is the investor and Oracle co-founder Larry Ellison.
Tesla’s incentive plan was revealed in a filing to the US Securities and Exchange Commission on Friday.
The filing referred to a pay deal awarded to Musk in 2018, approved by Tesla shareholders, that gave him the chance to land a $55.8bn bonus.
“Ultimately, 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,” the company said.
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 1 million “robotaxis” in operation and delivering a million AI bots, humanoid robots that the company is developing.
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In an apparent justification of Musk’s pay award, Tesla said: “If Elon achieves all the performance milestones […] his leadership will propel Tesla to become the most valuable company in history.”
A stock market value of $8.5bn is more than double the current value of Nvidia, the chipmaker that is currently the world’s most valuable company.
