US-based electric vehicle manufacturing giant, Tesla Inc., has reportedly put forth a monumental proposal for its billionaire founder and Chief Executive Officer (CEO), Elon Musk: a pay package potentially valued at an astounding $1 trillion. This groundbreaking proposition, revealed in a Bloomberg report on Friday, September 5, 2025, is strategically designed to heavily incentivize Musk to steer Tesla through a series of ambitious benchmarks in the upcoming years, solidifying his leadership role and long-term commitment to the company.

The intricate design of this incentive plan stipulates that Elon Musk will receive the full, massive payout only upon the successful achievement of these challenging targets. A pivotal condition includes the expansion of Tesla's robotaxi business to a staggering market value of at least $8.5 trillion over the next decade. Furthermore, details from Tesla's proxy filing, as cited by the news agency, indicate that the additional shares Musk could accrue through this compensation structure would significantly increase his ownership stake in the company, potentially reaching up to 25%.

This latest compensation effort by Tesla's board arrives amidst a backdrop of previous challenges regarding Musk's remuneration. As of September 5, 2025, Elon Musk continued to hold the title of the world's richest person, boasting a net worth of $378 billion, according to the Bloomberg Billionaire Index. It's important to note that a Delaware court had previously valued Musk's 2018 pay package at more than $50 billion, but later struck down that valuation. In response to these developments, Tesla's board of directors has been actively seeking alternative avenues for CEO compensation, including an interim stock award granted in early August, which was valued at approximately $30 billion.

Tesla's rationale behind pursuing such an unprecedented pay package is unequivocally clear: to retain and keep Musk intensely focused on the company's mission, even as he dedicates attention to other burgeoning ventures, particularly in robotics and artificial intelligence. The report suggests that if Musk successfully fulfills the demanding performance targets, the value of these latest CEO awards would dramatically increase to $1 trillion, a significant leap from their current valuation of $87.8 billion as of the proposal date. In a compelling shareholder letter, Tesla articulated its belief, stating, “Simply put, retaining and incentivising Elon is fundamental to Tesla achieving these goals and becoming the most valuable company in history,” thereby emphasizing the critical importance of Musk's continued guidance for the company’s future.

This drive for a new compensation structure has also been influenced by Elon Musk's own prior demands. He had reportedly urged Tesla's board of directors to arrange a new pay package, specifically indicating that if he did not possess 25% voting rights in the electric vehicle manufacturer, he would explore opportunities to pursue artificial intelligence and robotics products elsewhere. This assertion is notable given that Musk remains Tesla's largest shareholder, despite having sold some of his stockholdings to acquire Twitter, which has since been rebranded as 'X'. Despite Musk's often-competing priorities and diverse business interests, the agency report confirms that Tesla's board of directors remains steadfast in its support for Elon Musk.

In terms of market performance on the same date, Marketwatch data indicated that Tesla shares were trading 1.90% higher at $344.84 in the pre-market session on Nasdaq, an increase from their $338.53 closing price on Wall Street. The company’s overall market capitalization stood at $1.08 trillion as of September 5, 2025, reflecting its significant presence in the global market.