Tesla’s new pay package for CEO Elon Musk ties his compensation to the company reaching a market value of $8.5 trillion over the next decade.
To achieve this, Tesla would need to significantly expand its business, with key targets including the sale of 100 million humanoid robots annually or the creation of a robotaxi network far surpassing Uber’s revenue, reports Reuters.
The pay package, granted on September 3, is based on 12 milestones set by Tesla’s board, focusing on product development, profit, and market capitalization. If Tesla reaches these targets, Musk would receive a pay package worth up to $1 trillion. However, the plan is subject to shareholder approval in November.
Tesla’s current valuation stands at $1 trillion, and the company is aiming to more than double that, surpassing the combined market caps of Nvidia and Microsoft. A large part of Tesla’s future growth is expected to come from its Optimus humanoid robots and robotaxi services, which Musk believes could revolutionize industries.
Tesla’s vehicle sales have dropped in recent years, and its valuation remains high, trading at around 75 times its earnings before interest, taxes, depreciation, and amortization (EBITDA). Despite these challenges, Musk’s new pay package centers on the success of autonomous vehicles and robots.
Gene Munster, managing partner at Deepwater Asset Management, estimates that robotaxis and self-driving software could contribute a trillion-dollar increase to Tesla’s market value. Tesla has already begun testing robotaxis in Austin, Texas, with plans to deploy a million vehicles in the near future.
ARK Invest, a strong supporter of Tesla, predicts the company’s market cap could reach between $7 trillion and $10.9 trillion by 2029, driven by its robotaxi network. The forecast also suggests Tesla’s share of the ride-hailing market would be much larger than Uber’s.
Musk has also placed heavy emphasis on the Optimus humanoid robots, which he predicts could eventually account for 80 percent of Tesla’s total value. To meet the profit targets in his pay package, Tesla would need to sell over 100 million robots annually at $25,000 each. Achieving this level of sales would require a substantial increase in Tesla’s profit margin.
Financial analysts have noted that Musk’s pay package is aggressive, with targets much higher than most forecasts for Tesla’s car, energy, and robotaxi businesses. Some investors support
