Key Points
- Elon Musk’s new pay package is being sold as a set of “incredibly ambitious” goals.
- However, an analysis shows he could earn tens of billions by hitting only the easiest targets.
- The vehicle sales goal is lower than what Tesla sold last year, and other product goals are vaguely worded.
- The pay structure rewards hitting easy goals with the same payout as hitting difficult ones.
Elon Musk’s proposed new pay package from Tesla, potentially worth an astronomical $878 billion, is being sold to investors as a set of “Mars-shot milestones” that would require him to “completely transform Tesla and society.” However, a new analysis shows that Musk could still walk away with tens of billions of dollars without actually achieving most of those revolutionary goals.
A Reuters review of the pay plan found that Musk could collect over $50 billion by hitting just a handful of the board’s easier goals. In fact, hitting just two of the easiest targets, along with some modest stock growth, would net him $26 billion—more than the lifetime pay of the next eight best-paid CEOs combined.
Some of the targets are surprisingly easy to hit. For example, the vehicle sales goal would only require Tesla to sell, on average, half a million fewer cars per year than it did in 2024.
Other goals are written in vague language that could allow for big payouts without big breakthroughs. The “Full Self-Driving” subscription target doesn’t actually require the cars to be fully self-driving. The robotaxi and robot goals are written so broadly that they could be met by systems that still require human oversight or are not the advanced humanoid robots investors are expecting.
The structure of the pay plan is also a key issue. Musk receives the same massive stock payout for achieving an easy sales goal as he does for reaching a very difficult profit goal. For Tesla shareholders, the risk is that they could end up paying their CEO a historic sum for delivering on modest promises, not the world-changing revolution they were promised.
