When Tesla’s board of directors offered Elon Musk the biggest executive pay package in corporate history in September, it reassured investors that he would have to achieve the equivalent of “Mars-shot milestones” to earn $878 billion in Tesla stock over 10 years.
The board’s proposal said Musk would have to “completely transform Tesla and society as we know it” in robotics and autonomous driving as well as stock value and profits. Conversely, Musk would get “zero” unless he meets those “incredibly ambitious” goals.
Yet Musk could reap tens of billions of dollars without meeting most of those targets, according to a Reuters analysis of his performance goals and more than a dozen experts in executive pay, company valuations, robotics and automotive trends including autonomous driving.
He could collect more than $50 billion by hitting a handful of the board’s easier goals that won’t necessarily revolutionize Tesla’s products or business, the Reuters review found.
Even hitting just two of the easiest targets, along with modest stock growth, would net Musk $26 billion, more than the lifetime pay of the next eight best-paid CEOs combined, a group that includes Meta Platforms’ Mark Zuckerberg, Oracle co-founder Larry Ellison, Apple’s Tim Cook, and Nvidia’s Jensen Huang, according to an analysis for Reuters by research firm Equilar.
Musk’s vehicle sales goals are exceptionally easy to achieve, according to four automotive experts. If Musk sells 1.2 million cars a year over the next decade, on average, he earns $8.2 billion in stock if Tesla’s market value grows from $1.4 trillion today to $2 trillion in 2035, well under long-term market-average growth. That’s a half-million fewer cars per year than Tesla sold in 2024.
On Tuesday, Tesla unveiled lower-cost versions of its best-selling Model Y SUV and Model 3 sedan to reverse falling sales.
Three other product-development goals are written in vague language that could provide Musk hefty payouts without significantly boosting profit, according to six robotics or autonomous-driving industry experts who reviewed Musk’s goals for Reuters.
Tesla and Musk did not respond to requests for comment.
In a statement, a spokesperson for the Tesla board said: “The proposed pay package is actually worth zero to our CEO unless and until the shareholders see the value of the company nearly double and an operational milestone is met.”
The board’s pay proposal requires Musk to remain a Tesla executive for at least seven-and-a-half years to collect any stock compensation. Musk, however, would get the voting rights associated with the share awards as soon as he earns them.
Musk said last month on his social media platform X that the package is “not about ‘compensation,’ but about me having enough influence over Tesla to ensure safety if we build millions of robots.”
In its proposal, the board said Musk is “motivated by more than just conventional forms of compensation.”
SELF DRIVING CARS, ROBOTAXIS AND ROBOTICS
Each goal grants Musk 1% of Tesla stock if he also reaches valuation milestones between $2 trillion and $8.5 trillion.
One goal requires 10 million subscriptions to Tesla’s “Full Self-Driving” (FSD) software, which can’t currently drive itself without human intervention.
The U.S. National Highway Traffic Safety Administration said Thursday it is opening an investigation into 2.88 million FSD-equipped Tesla vehicles over more than 50 reports of traffic-safety violations and a series of crashes.
Musk’s performance goal contains no requirement that Tesla make FSD fully autonomous, instead requiring only an “advanced driving system.”
That’s a “made-up term” with no industry-standard definition, said William Widen, a University of Miami law professor specializing in autonomous driving. Autonomous-driving experts say the subscription target might be easily met by dropping the price, currently $8,000 upfront or $99 a month. Tesla’s leading electric-vehicle rival, China’s BYD, already offers a similar system for free.
“If I were Musk’s personal employment lawyer, I would like these definitions,” said Matthew Wansley, a professor at New York’s Cardozo School of Law who focuses on autonomous driving.
Another goal requires one million robotaxis in commercial operation and specifies cars “without a human driver in the vehicle.” That’s a potentially more restrictive definition but four autonomous-vehicle experts said it could be interpreted to allow for humans controlling vehicles remotely or from the passenger seat – as Tesla does now in its first small-scale robotaxi test in Austin, Texas.
Musk’s employment deal also sets a target of one million robots, an apparent reference to the Optimus humanoid robots Musk has long promised. But the goal doesn’t specify “humanoid” and could be interpreted broadly, two robotics-industry experts said. It defines “bot” as “any robot or other physical product with mobility using artificial intelligence.”
“It’s a totally vague formulation,” said Christian Rokseth, an analyst with market research firm Humanoid.guide specializing in robotics and artificial intelligence. Investors, he said, are expecting a humanoid robot.
