Tesla jumped more than 2% in premarket trading on Friday after the company proposed an unprecedented roughly $1 trillion pay package for CEO Elon Musk, according to proxy filings.
To receive the massive payout, Musk will have to increase the company’s market cap to $8.5 trillion from the approximately $1 trillion it’s at today over the next 10 years.
The pay package also requires that Musk expand Tesla’s product offerings to include 1 million robotaxis in commercial operation and the “delivery of 1 million AI Bots.” Currently the company has about 30 autonomous robotaxis in its invite-only Austin ride-hailing service, though this week the company expanded the waitlist for the service to everyone. Tesla’s Optimus robots are still under development.
Musk would also have to take part in his own succession planning and develop a framework for who’s to follow him.
Investors have historically tied the fate of Tesla to Musk, so holding on to him for an extended period of time and having his blessing for the succession plan is typically seen as good news for the stock.
“We believe that Elon’s singular vision is vital to navigating this critical inflection point,” the filing reads. “Simply put, retaining and incentivizing Elon is fundamental to Tesla achieving these goals and becoming the most valuable company in history.”
A judge twice struck down Musk’s previous $56 billion compensation package. Last month, the board approved a $30 billion interim pay package, saying that “retaining Elon is more important than ever.”
Shareholders will vote on the pay package at their annual meeting on November 6.
