Billionaire technocrat Elon Musk will likely take home a fat pay cheque and increased share in Tesla regardless of achieving the toughest targets in his $1 trillion pay package from the automaker, but it is the shareholders who will be left holding the short end of the stick, according to a Fortune report.
Approved on November 6, 2025, the $1 trillion pay package could make Elon Musk the world first-ever trillionaire, but the report notes that regardless of whether he manages to nab the entire 13-figure payout, the world's richest man will still take home a sizeable amount.
Why and how? Well, the package is structured in 12 tiers that “unlock” as and when the Tesla chief achieves a milestone. However, the report notes a key quirk — the lowest tiers are easily achievable, and once “unlocked” give Elon Musk nearly a guaranteed payout regardless of whether the tougher targets are met.
How does Elon Musk's payout structure work?
According to the report, the package gives out “performance milestones” are spread out over 12 valuation and operations targets over 10 years.
For the financial targets, Tesla must reach a market cap of $2 trillion first and grow up to $8.5 trillion in tranches of $500 billion each over the full period; and reach Ebitda tiers from $50 billion to $400 billion. For the operational goals, deliveries of Tesla cars, robotaxis, humanoid robots and self-driving software are key sales targets.
Every time Elon Musk reaches a target, he will receive 35.312 million shares or around 1% in Tesla restricted stock above his current 16% stake. The total in full is 424 million shares ($1 trillion in stock value) for achieving all targets.
The stock has two vesting periods — those achieved in the first five years till early 2033, and those in the later five years till late 2035.
Can Elon Musk reach all targets?
The odds are low, as per the report. For example, one goal requires robotaxi fleet to reach 1 million — at present the company has only 2,000 on the road. Further, in terms of stock valuation, hitting the second highest mark of $2.5 trillion would mean the company stock would have to jump 85% in 10 years — a huge ask!
It however added that the lower targets are “easy”, which means that Elon Musk will still make good money. For example, he is required to sell a cumulative 20 million Tesla vehicles over 10 years — the company has already sold 8 million, which makes the effective requirement 12 million. In the past four quarters, Tesla has already delivered 1.9 million cars, at an average 2 million cars annually, by year six he can ring the bell on that goal, with minimal increase, it added.
Another example is the target of taking valuation to $2 trillion — Elon Musk has on previous occasions boosted the stock by building expectations (i.e. robotaxis, full self-driving, etc.) and all he has to do is keep the average at or above $2 trillion for six months, and in the last 30 days, to lock in the payout.
Do Tesla shareholders have most to lose?
According to the report, on average, Elon Musk is expected to net a $900 billion payout — $90 million each year. The shareholders on the other hand, stand to gain merely 5.9% annually, with valuation taking to shares from $334 to $585 over 10 years.
Elon Musk will make a windfall even against to other big names. For comparison, Amazon's Andy Jassy made $40 million in a year, Goldman Sachs' Jamie Dimon made $39 million, Nvidia's Jensen Huang made $34 million, Meta's Mark Zuckerberg made $27.2 million, Microsoft's Satya Nadella made $79 million, Alphabet's Sundar Pichai made $10.7 million, and Apple's Tim Cook $75 million.
At his worst performance, if Tesla shares end at $1.8 trillion market cap or below the $2 trillion (first valuation milestone), Elon Musk still makes $727 million, while shareholders get returns that barely beat inflation, it added.