Elon Musk’s path to ‘trillionaire’ status isn’t guaranteed — The devil is in the details

Tesla chief Elon Musk is riding high, after as many as 75% shareholders at the electric vehicle (EV) maker signed off on his whopping, historic $1 trillion pay package, which exceeds even the GDPs of some countries.

So, does this mean that Elon Musk is now officially the first-ever trillionaire in world history? No, not just yet.

While the pay package has been approved, the disbursals are subject to a series of tough performance milestones to be achieved by the tech mogul over a period of 10 years. And if these are not met, the board could hold back on the massive rollouts.

What targets will Elon Musk have to meet to get full $1 trillion pay from Tesla?

Elon Musk has been given the “biggest CEO pay package in corporate history”, which includes around 25% total stake in the company, as per an AP report, while noting that his performance targets are “ambitious”. Notably, he is already Tesla's largest shareholder.

What does Elon Musk have to achieve? Well, according to a Washington Post report, the full pay by Tesla will be awarded in 12 tranches as the businessman reaches each milestone. But critics felt that when it comes down to it, the board holds discretion on certain terms of the stock awards, which could make the targets “suggestions rather than mandates”, it said.

• Among other things, including many operational and financial targets, he is required to sell one million of Tesla's much-touted humanoid robots over the next 10 years, the AP report noted. At present, this number is 0.
• He has to also deliver up to 20 million (2 crore) Tesla cars in the period — double the company's sales over the past two years, it said.
• He must reach 10 million (1 crore) active subscriptions for Tesla's Full Self-Driving (FSD) service.

• He must also deploy at least 1 million (10 lakh) robotaxis in commercial operation.
• Elon Musk must also remain the Tesla CEO for seven and a half years in order to vest in any shares from the new pay package. This is not subject to his divestment from other companies such as xAI and SpaceX.
• He will receive additional 12% shares of Tesla, if market cap increases to at least $8.5 trillion.
• Further, the package requires Elon Musk to outline plans for the succession of Tesla. While he must “develop a framework” for the eventual succession by a new Tesla CEO, his exit from the role is not subject to a timeline.

How much will Elon Musk get if he fails to achieve Tesla targets?

The pay package approval from shareholders is a “vote of confidence” in Elon Musk — who has a track record of overpromising on products like his Optimus robots, as per the WaPo report.

And even if he does fail, Elon Musk will be failing upwards. The world's richest man will make at least $50 billion in additional Tesla shares, for rocketing the carmaker's market value by 80% (he achieved this last fiscal), doubling vehicle sales, and tripling operational earnings, the AP report added.

According to a CNBC report, Elon Musk at present gets no salary and his entire compensation was in Tesla stock. So, even if the massive trillion-dollar payout doesn't pan out, if he manages to take the carmaker's stock near $8.5 trillion market cap, Elon Musk could still become the world's first-ever trillionaire.

(With inputs from AP)