In a landmark decision that is set to rewrite corporate compensation history, Tesla shareholders on Thursday officially approved an unprecedented pay package for Chief Executive Officer Elon Musk. This compensation plan, which has a potential value of up to $1 trillion, is the largest payout ever granted to a corporate leader. The decision comes amidst concerns raised by Tesla’s board that Musk might step down from his CEO role if the proposal failed to pass.
The newly approved agreement clears a hypothetical path for Musk to become the world’s first trillionaire. He already holds the title of the world’s richest man, with a net worth of $491.4 billion at the time of writing, according to Forbes.
Musk vs. Bezos: A Billionaire Compensation Contrast
The staggering figure of Musk’s potential compensation naturally invites comparisons to other tech titans, most notably Jeff Bezos, the founder, former President, and CEO of Amazon. Bezos is currently the third richest person globally, with a reported net worth of $253.3 billion.
The contrast in their official corporate compensation is stark:
Jeff Bezos’ Modest Amazon Paycheck
While he founded and led one of the world’s most valuable companies, Jeff Bezos reportedly took home only a modest annual salary as Amazon’s CEO.
- Annual Salary: Bezos reportedly took a paycheck of just $80,000 per year as the CEO of Amazon.
- The Rationale: Bezos has publicly explained his reasoning for refusing additional compensation, including bonuses and stock grants. Speaking at the 2024 New York Times DealBook Summit, he stated, “I already owned a significant amount of the company, and I just didn’t feel good about taking more… I just felt how could I possibly need more incentive?” He emphasized that as a founder with a significant equity stake, his wealth was already tied to the growth of the company’s stock value, making a large salary or bonus unnecessary.
Elon Musk’s Performance-Based Path to Trillions
In contrast to Bezos’s fixed, modest salary, Musk’s new package is entirely performance-based and tied to extremely aggressive corporate goals.
- Goal: The new pay package will expand Musk’s stake in Tesla to 25% or more over the next decade.
- Vesting Requirements: To receive the full, colossal payout, Musk must successfully deliver on ambitious long-term performance targets. These include:
- Significantly expanding Tesla’s market value to a colossal target, potentially reaching $8.5 trillion.
- Reviving and significantly expanding the flagging car business.
- Successfully launching and ramping up the fledgling robotaxi and robotics efforts (such as the Optimus humanoid robot).
Following the announcement of the shareholder approval, Tesla shares rose by 1.8% in postmarket trading in New York, a reflection of the market’s positive reaction to securing Musk’s commitment.