Tesla’s $1 Trillion Musk Compensation Plan: Motivation for Expansion or Overly Generous?

Shareholders of Tesla Inc. (TSLA) are scheduled to cast their votes on November 6 regarding a highly debated compensation plan for CEO Elon Musk, which could be worth as much as $1 trillion, according to

. This proposal, which is tied to challenging operational goals, has ignited strong discussions among investors. Notably, some major backers such as Atreides Management's Gavin Baker are in favor, even as many others oppose it, as reported by .

To unlock the payout,

must reach a market value of $8.5 trillion within the next ten years and hit targets for car deliveries, robotaxi launches, and humanoid robot progress, according to Stocktwits. If shareholders approve, Musk would not receive a salary but could be granted up to 423.7 million shares over a decade, following a structure similar to his 2018 compensation plan, which was later invalidated by a Delaware court for being too generous.

Baker, whose firm is in favor of the plan, maintains that tying compensation to performance is vital for Tesla’s continued expansion. He wrote on X that "shareholders should generally support thoughtfully structured performance-based CEO compensation packages because they incentivize CEOs to create transformational growth and value." Tesla’s Board Chair Robyn Denholm has cautioned that Musk may depart if the package fails, which could unsettle the company.

On the other hand, prominent institutional investors such as CalPERS and the New York State Retirement Fund intend to vote against the plan. Proxy advisors Glass Lewis and Institutional Shareholder Services have also urged a no vote, calling the package excessive, while Musk has labeled these firms "corporate terrorists."

Should the compensation plan pass, it could have a major effect on Tesla’s stock, which has climbed 9% so far this year and 76% over the past year. Stocktwits data indicates that retail investors remain largely pessimistic, though message activity has leveled off. Analysts are split, with some arguing the package is crucial to keeping Musk at the helm, while others see it as an unnecessary reward given Tesla’s already lofty valuation.

In other news,

notes that OpenAI is targeting a $1 trillion IPO by the end of 2026, and Bitget data reveals Zcash (ZEC) futures open interest has jumped 25% (details in the Bitget release). Still, Tesla’s internal debate highlights the significant risks and rewards of linking executive pay to long-term growth in high-risk tech industries, as discussed in the Yahoo video.