I. 2012 Compensation Plan
1. Target: Unlocked in 10 phases, each phase requiring two conditions: 1) a $4 billion increase in market capitalization, and 2) achievement of an operational target (primarily a production target).
2. Target Achieved: In 2018, Tesla's market capitalization reached $50 billion, and Musk achieved all targets as promised.
3. Compensation Plan: Granted approximately 5.27 million common stock options with an exercise price of $31.17 per share, representing approximately 5% of Tesla's total common stock.
II. 2018 Compensation Plan
1.
Target: Unlocked in 12 phases, each phase requiring two conditions: 1) a $50 billion increase in market capitalization, and 2) achievement of an operational target (revenue or adjusted earnings). Ultimately, Tesla's market capitalization must reach $650 billion, revenue must reach $175 billion, and adjusted EBITDA must increase to $14 billion. 2. Goal Achievement: Revenue and profit targets will be achieved in 2020, with Tesla's market capitalization exceeding $650 billion in 2021.
3. Compensation Plan: 1.7 million shares will be conditionally unlocked at each stage; achieving all targets will result in a 12% stake in Tesla, with a theoretical return exceeding $55 billion.
4.
Legal Disputes: ① In January 2024, a Delaware court invalidated the compensation plan, arguing it was "unfair to shareholders." ② In June 2024, shareholders voted again to approve the plan. ③ In December 2024, a Delaware court again rejected the plan. ④ In October 2025, Tesla appealed Musk's $56 billion compensation plan.
5.
Disagreements: The Delaware court found the compensation package excessive, appeared to have been negotiated by directors who were beholden to Musk, and was therefore unfair to shareholders. Most shareholders wanted to retain Musk and were concerned about his development of artificial intelligence products outside of Tesla. Musk believes he has led Tesla to "almost impossible goals" and deserves his astronomical compensation.
III. 2025 Compensation Plan (Not Yet Approved)
1.
Goal: Unlocked in 12 phases, each requiring two conditions: 1) an increase in market capitalization of $500 billion or $1 trillion, and 2) achievement of an operational target (revenue or adjusted profitability). Ultimately, Tesla's market capitalization must reach $8.5 trillion, roughly eight times its current value. Operational targets include delivering one million Robotaxis, commercializing one million self-driving taxis, and achieving a series of adjusted EBITDA benchmarks.
2. Compensation Plan: Musk will receive over 423 million shares, increasing his ownership stake to approximately 25%, with a potential value of nearly $1 trillion.
3. Disagreements: Proxy advisory firms ISS and Glass Lewis are urging shareholders to oppose the plan, citing the potential for significant shareholder dilution. Tesla countered that it ignores the company's achievements under Musk's leadership and its vision for creating exceptional value. Musk believes the core of his compensation package is obtaining sufficient voting rights to control the company's next phase of development, and he denounced ISS and Glass-Lewis as "corporate terrorists."
