Tesla’s board has approved a $1 trillion pay package for CEO Elon Musk on the condition he meets a series of performance targets over the next decade. “It’s not just a new chapter for Tesla,” said Musk. “It’s a new book.”
The decision was met with “cheers and chants” at the company’s annual shareholders' meeting, said CNN. Musk does not receive a salary but, assuming the “lofty” targets are met, the shares in the package would be worth $275 million a day, “dwarfing any other executive pay package in history”.
‘Miracle man’ or ‘erratic leader’?
For Musk, the central requirement of the deal is to raise the value of Tesla from around $1 trillion to $8.5 trillion. Additional stipulations mean the achievement “won’t be easy”, said Sky News. Musk will also need to deliver 20 million Tesla vehicles over the next decade, which is “double the number churned out” since 2013.
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What’s more, he needs to “roll out” one million AI-powered robots “despite the fact it hasn’t released a single one so far”. And most importantly, he needs to provide a “succession plan” for his chief executive role. But “even if Musk falls short of some of these targets, he could end up earning a lot of money”.
Many investors see Musk as a “miracle man capable of stunning business feats”, making him indispensable to the company, said The Guardian. Despite Musk’s turbulent venture into US politics and rifts with Donald Trump destabilising Tesla’s sales, including a 50% decline in Germany, he will always be seen by his supporters as the man who brought them from the “brink of bankruptcy” to “one of the world’s most valuable companies”.
Despite 75% of the shares voting in favour of the proposal, the package was not without its opponents among the shareholders, said ABC News. Norway’s $2 trillion sovereign wealth fund has been “raising concerns about its scale and potential risks”. In a separate statement, the fund expressed reservations about the “total size of the award, dilution, and lack of mitigation of key person risk”.
A ‘winner-takes-all version of capitalism’
The timing of this deal shows the “split screen” of “strikingly different lessons about” who deserves wealth in America, said The New York Times. The Tesla vote comes just two days after New York elected the “tax-the-rich candidate as their next mayor”.
While Musk champions a “winner-takes-all version of capitalism”, Zohran Mamdani’s dominant result in New York serves as a “reminder of the frustrations many Americans have with an economic system”. For Musk’s political detractors, he could soon become a “foil” to exploit the “divide in American business and politics”.
The scale of Musk’s remuneration, if achieved, is “staggering”, said The Guardian. It “exceeds the GDP of entire countries, including that of Ireland, Sweden and Argentina”. Critics of the deal point out the danger of concentrating power in “one erratic leader” who has blindly “ignored the challenges the company has faced”.
