Tesla"s board granted and approved the 2025 CEO Performance Award on September 3, 2025. Previously, Tesla’s board came under fire for awarding a massive performance award to Elon Musk. After some shareholders took the case to the court, Elon Musk"s award was canceled as the court found it illegal.
The newly proposed performance award is structured to tie Musk"s compensation to a series of ambitious market capitalization and operational milestones for Tesla. Here"s the summary of milestones outlined in company filings:
- Market Capitalization: The plan has 12 market cap milestones in total:
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First Goal: Reach a market cap of $2 trillion.
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Next 9 Goals: After that, each new goal is an additional $500 billion, going all the way up to $6.5 trillion.
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Final 2 Goals: The last two goals are bigger jumps, each requiring an additional $1 trillion, with the final target being $8.5 trillion.
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- Operational Milestones: These 12 operational goals are split into two types:
- Product Goals (4 total):
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Deliver 20 million Tesla vehicles.
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Reach 10 million active F-S-D subscriptions.
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Deliver 1 million Optimus bots.
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Have 1 million Robotaxis operating commercially.
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- Financial Goals (8 total):
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Achieve eight different levels of Adjusted EBITDA (a measure of profit), starting at $50 billion and going up to $400 billion.
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- Product Goals (4 total):
If Elon Musk increases Tesla"s market value to $8.5 trillion, with this new Performance Award, he could get around $900 billion. It would be the largest executive pay deal in history. Also, if successful, his ownership stake in Tesla would rise to nearly 29%, giving him an exceptional level of control over the company.
The board"s main goal is to keep Elon Musk and motivate him to lead Tesla"s next major growth phase. They believe he is uniquely qualified for this and is driven by huge, industry-changing challenges rather than typical pay.
Mr. Musk is independently wealthy and has consistently demonstrated that he is motivated by more than just conventional forms of compensation. Rather, he is driven by bold, high-stakes challenges that allow him to fundamentally reshape industries and society, while maximizing long-term shareholder value. The Special Committee believes that retaining and incentivizing Mr. Musk as Chief Executive Officer at this pivotal moment is essential to Tesla’s successful transition from its role as a leader in the EV and renewable energy industries to growing into a leader in AI, robotics and related services.
This bold and huge compensation plan is a clear statement from Tesla"s board, betting that Musk"s visionary leadership is needed for the next phase of the company"s growth.
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