Prime Highlight:
- Tesla has proposed a record-breaking pay package for Elon Musk worth up to $1 trillion, aiming to keep his focus on the company.
- Musk’s wealth is now driven more by SpaceX and xAI, whose valuations have surged past the value of his Tesla shares.
Key Facts:
- Musk owns about 13% of Tesla, valued at around $140 billion, while his stakes in SpaceX and xAI together are nearly double that.
- If Tesla shareholders approve the 2025 compensation plan and the company reaches its $8.5 trillion target valuation, Musk’s Tesla stake could be worth over $2 trillion.
Key Background:
Tesla has put forward a bold compensation plan for CEO Elon Musk, as the company seeks to retain his focus amid the soaring valuations of his private ventures. According to a proxy filing last week, the electric carmaker is proposing a share award that could be worth up to $1 trillion if performance targets are met.
The company acknowledged that a majority of Musk’s wealth is now tied to other businesses, primarily SpaceX and artificial intelligence startup xAI. Tesla argued that the new package is necessary to prevent Musk from diverting attention away from the automaker as he balances competing interests across his ventures.
“Mr. Musk has more attractive opportunities today than ever before,” the filing stated, adding that the award of up to 423 million shares would help ensure he remains committed to Tesla’s long-term goals.
Until recently, Musk’s fortune was largely built on his Tesla stake. Bloomberg estimates his net worth at $385 billion, while Forbes places it at $436 billion, depending on how his 2018 compensation package is valued. Today, less than half of his wealth comes from Tesla shares, which are worth around $140 billion based on his 13% ownership.
By contrast, Musk’s private companies have surged in value. SpaceX is preparing a share sale that could value the rocket company at $400 billion, giving Musk’s 42% stake an estimated worth of $170 billion. Meanwhile, xAI’s valuation has soared from $80 billion earlier this year to a possible $200 billion, with Musk holding a majority stake valued at more than $100 billion. Together, these holdings are nearly double the value of his Tesla stake.
Musk is also a shareholder in Neuralink, which is estimated to be worth about $9 billion, and other businesses. If the Tesla 2025 pay plan is accepted and the company achieves its target value of $ 8.5 trillion, the stock of Tesla vested to Musk alone could encompass more than $ 2 trillion.
This demonstrates the extent to which Tesla relies on Musk’s leadership, as well as the increasing strength of his other companies.
