Tesla wants to make Musk a trillionaire to keep him focused – but his political drama already tanked the stock price

Tesla’s board has put forward a shocking new pay package for CEO Elon Musk that could make him the world’s first trillionaire. The proposal would give Musk around 423 million shares in the company if Tesla meets big goals over the next 10 years. The main target is growing Tesla’s market value to $8.5 trillion.

Under these conditions, the pay package would be worth about $1 trillion. This would boost Musk from a multibillionaire to the world’s first trillionaire. The proposal still needs approval from Tesla shareholders, who will vote on November 6.

The proposal comes as some people have worried about Musk’s focus on the company. According to The Hill, the Tesla board said it is “imperative for Tesla’s continued success and transformative growth that Mr. Musk be retained and highly incentivized to focus a significant amount of his time and efforts towards achieving his vision for Tesla.” But the company has already felt the effects of Musk’s political activities, which cost Tesla dearly when he got involved in politics.

Why Tesla is offering such a massive package

The tech mogul owns X, SpaceX, Neuralink, and the Boring Company. He added politics to his already packed schedule when he briefly took on a role in the Trump administration leading the Department of Government Efficiency (DOGE). This move proved particularly costly for Tesla, which saw its share price and earnings tank as the EV maker became a political symbol.

The company continued to feel the effects even after Musk left the White House. The Tesla CEO got into a very public fight with President Trump, who threatened to target Musk’s government contracts and subsidies. Tesla revenue dropped 12% and profits fell 16% in the three months through June, according to company earnings reports.

His previous pay package, initially worth about $56 billion, has remained tied up in court since it was struck down by a federal judge in Delaware last year. This appears to have been a point of argument as Musk pushed for assurances about compensation. He also wanted a 25% voting stake in Tesla. The latest pay package would provide Musk with about 12% of Tesla shares, bringing his voting power to around 25%, as requested. Meanwhile, his political involvement has continued to create headaches for the company.

AI competition drives the urgency

Tesla has increasingly focused on AI and robotics, in the form of self-driving cars and humanoid robots. As tech firms race to develop AI, this has resulted in fierce competition to attract top talent. The board noted that “the failure to retain and incentivize Mr. Musk could put Tesla at risk of losing not only its CEO and leader in the AI field, but also the AI talent that would likely be inclined to leave in the absence of his leadership.”

The company aims to produce several thousand Optimus humanoid robots in 2025, with plans for 50,000 to 100,000 units in 2026. Tesla is also working on launching its robotaxi service to half the U.S. population by the end of 2025. These ambitious goals are part of Musk’s vision to transform Tesla from a car company into an AI and robotics leader. Wedbush Securities analyst Dan Ives called keeping Musk “essential” at this critical time, writing that “the biggest asset for Tesla is Musk” and “with the AI Revolution this is a crucial time for Tesla ahead.”