Elon Musk’s new pay package with Tesla made headlines for its potential to make him the world’s first trillionaire.
But while the company claimed such massive payment would only occur with it reaching lofty goals, a new analysis shows Musk could still reap tens of billions of dollars, even if the company misses most of those targets.
In September, Tesla’s board proposed a new compensation package for Musk, the company’s CEO. The package topped out at an eye-popping $878 billion in Tesla stock over 10 years, if the company reached a number of ambitious goals.
As Reuters reported, the board also told investors Musk would receive “zero” if the company didn’t reach “Mars-shot milestones.” But Reuters’ analysis of the proposal shows that the assessment is nowhere near true.
If, for example, the company sells 1.2 million cars per year over the next 10 years — less than it sold in 2024 — and its stock price grows at less than the market average, Musk will make at least $26 billion.
Certain other goals are worded in ways that could also make it easier than anticipated for Musk to reach.
Among the many targets in the deal is Tesla developing 1 million robots. And while it’s believed that refers to Musk’s long-touted Optimus humanoid robot, experts pointed out that the contract doesn’t specify that and could be interpreted in many different ways.
“It’s a totally vague formulation,” analyst and robotics expert Christian Rokseth told Reuters.
Tesla was once at the forefront of electric vehicles, but its dominance within the industry has since taken a step back.
The company’s EV sales have taken a steep fall, with some markets representing year-over-year sales that are more than 50% down. In particular, its newest model, the much-hyped Cybertruck, has seen sales plummet.
Instead, much of Musk’s focus seems to be on autonomous cars and robots. One of Tesla’s big driverless projects, the Robotaxi, launched earlier this year in Austin, Texas. Despite some dangerous behavior from the self-driving cars, the service has quickly expanded.
While his pay package incorporates bonuses from both EV sales and robotics developments, the shift in focus could harm advances in the vehicles that are available to motorists, which might slow the wider shift to electric vehicles if progress on the technology stalls.
