Summary of Elon Musk‘s New Tesla Compensation Plan (November 6, 2025)
Here’s a breakdown of the key details of Elon Musk’s newly approved compensation plan at Tesla:
Approval & Voting:
* The plan was approved by 75% of voting shares at Tesla’s annual shareholder meeting on November 6, 2025, in Austin, Texas.
* The vote followed a period of intense campaigning by Tesla, including interviews and television advertising.
* Despite board support, major advisory firms (Glass Lewis and ISS) recommended voting against the plan.
* The plan comes after a Delaware court invalidated a previous $56 billion compensation package, which Tesla is appealing.
Compensation Structure:
* The plan awards shares in 12 tranches over the next decade, tied to achieving specific milestones.
* Musk won’t receive a salary, but could earn hundreds of billions of dollars worth of stock.
* The plan significantly increases Musk’s voting power, from approximately 13% to 25% (adding 423 million shares).
Key Milestones & Goals:
* Market Capitalization: Tesla needs to reach a market cap of $8.5 trillion within 10 years (currently around $1.54 trillion). Installments are awarded as the market cap increases in stages ($2T, then $500B increments to $6.5T, then $1T increments).
* operational Goals:
* Deliver 20 million vehicles (currently over 8 million).
* Reach 10 million active users of Full Self-Driving (FSD).
* Deliver 1 million Optimus robots.
* Launch commercial operations of 1 million Robotaxi vehicles worldwide.
* Financial Goals:
* Adjusted annual profits must start at $50 billion and increase to $400 billion.
Potential Earnings & Contingencies:
* Musk could receive tens of billions of dollars (potentially over $50 billion) even if not all goals are met.
* ”Covered events” (natural disasters, wars, legal changes) could allow Musk to acquire shares even without meeting operational milestones.
Other Notable Points:
* The plan doesn’t limit Musk’s political activities, despite research suggesting they could impact Tesla sales.
* A separate proposal to allow Tesla investment in Musk’s xAI company also received shareholder support (though with a significant number of abstentions).
* Musk envisions Optimus robots as having a transformative impact, “more than a mobile phone,” and potentially “eliminating poverty” and revolutionizing healthcare.
