Electric vehicle giant Tesla has revealed in a regulatory filing that CEO Elon Musk's potential annual compensation for 2025 could reach an astonishing US$158.36 billion (~HK$1.24 trillion). However, the astronomical figure is entirely composed of stock awards, and because Tesla failed to meet any of its market capitalization or operational targets last year, Musk's actual take-home pay was zero.
According to media reports, the compensation plan, which was approved by Tesla shareholders last November, consists entirely of stock awards distributed in 12 tranches.
For Musk to fully vest the entire package, he must lead the company to achieve an enormous market capitalization of US$8.5 trillion and meet several ambitious operational milestones.
These goals include delivering 20 million vehicles, selling one million humanoid robots, commercializing a fleet of one million Robotaxis, and recording US$400 billion in core profit.
If all targets are successfully met, he stands to gain approximately 12 percent of the company's shares over ten years, valued at around US$1 trillion.
In its filing, Tesla stated that of the more than US$158 billion reported for Musk's compensation last year, about US$132 billion represents the maximum fair value assuming all performance conditions are met.
The remaining US$26 billion was a provisional award approved by the board last August, which Musk subsequently relinquished in April of this year. Since he did not achieve any of his targets last year, his actual realized compensation was zero.
Danni Hewson, Head of Financial Analysis at AJ Bell, explained that Musk will not actually be pocketing the US$158 billion immediately, as he did not meet a single milestone last year.
She emphasized that this massive figure is merely a "promise" contingent on him completing the corresponding tasks. Hewson added that while the goals are set incredibly high, they are intended by investors to refocus Musk's attention on the development of the electric car manufacturer.
Despite effectively working for free at Tesla for a year, Elon Musk remains firmly at the top of the global rich list.
Data from Bloomberg and Forbes estimate his net worth at US$651 billion and US$788 billion, respectively, far exceeding that of other tech giants' CEOs. Hewson commented that this means while Musk isn't drawing a salary from Tesla, he can certainly afford to wait.
Meanwhile, his aerospace company, SpaceX, is actively preparing for an initial public offering (IPO) following its recent merger with AI startup xAI.
The move could position SpaceX to become one of the most valuable publicly traded companies in the world.
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