Press X to Doubt Elon Musk will get his Trillion Dollar Tesla Pay Package

CEO Performance Awards

Q What's the difference between a million dollars and a billion dollars?
A About a billion dollars.

Q What's the difference between a billion dollars and a trillion dollars?
A About a trillion dollars.

Typing it out ... how many zeros is that ...

$1,000,000,000,000

On November 6th 2025, Tesla concluded a shareholder vote that would grant Elon Musk enough TSLA shares to be worth $1 trillion, for a cumulative ownership of 25% of the company, contingent on the company meeting a specified set of Key Performance Indicators (KPIs).

Shareholders voted yes with a resounding ~75% approval rating in favor of the pay package.

Clearly owners of Tesla stock believe in Elon Musk's capabilities as a leader and the promises he is making about the future of the company. Should they?

In his opening statement at the shareholding meeting in Texas, Elon had this to say:

Time to pull a LOT of rabbits out of the hat!

So, what exactly are those KPIs the company must meet for Elon to earn his pay package?

The Twelve Tranches of Success

The pay package is technically structured into 12 individual, sequential tranches. For Elon to hit that unbelievable trillion-dollar payout, Tesla must meet all of them, in order. Additionally, the tranches are structured into two halves: one half based on specific increases Tesla's Market Capitalization, and the other half on Operational Milestones.

To qualify, each Market Capitalization increase must be paired with an Operational Milestone achievement. Elon's reality distortion field may pump the stock, but the company must actually ship product to qualify. Each of these objectives will be measured over a six month and 30 day trailing basis.

Market Capitalization Milestones

1st tranche

Tesla must reach a market capitalization of $2 trillion, which is roughly $500 billion higher than it is today (in November 2025).

tranches 2-10

Tesla must increase market capitalization by $500 billion for each consecutive tranche. The final tranche in this segment would place Tesla at a valuation of $6.5 trillion.

tranches 11 and 12

Tesla must increase market capitalization by $1 trillion for each consecutive tranche. The final tranche in this segment would place Tesla at a valuation of $8.5 trillion.

Putting these market capitalization increases into perspective is ... yikes.

Operational Milestones

In addition to increasing market capitalization for each tranche, Tesla must also achieve any one of the following operational milestones.

• Deliver 20 million Tesla vehicles cumulatively
• Reach 10 million active Full Self Driving (FSD) subscriptions
• Deliver 1 million Optimus robots
• Deploy 1 million Robotaxis into commercial production
• Meet annual adjusted EBITDA milestones

Those adjusted EBITDA milestones start at $50 billion and conclude all the way up to $400 billion. To put those numbers into perspective, Tesla's 2024 EBITDA was around $12.44 billion.

Only Tesla is aware of the underlying challenges involved in reaching any one of these objectives. Considering each goal must be paired with a market capitalization target, it becomes apparent Elon and his company have a lot of difficult work to do.

Perhaps the easiest and most straightforward objective will be the selling of 20 million Tesla vehicles. Current estimates point to Tesla having sold about 8.5 million vehicles so far. Reaching that target doesn't seem to be too much of a stretch in the coming years.

But what about these other objectives? Tesla CFO Vaibhav Taneja had this to say about FSD adoption.

The total number of customers paying for FSD is still small, representing only about 12% of our existing fleet.

That would place the total number of FSD users at around 1 million, or a full order of magnitude short of the required operational milestone. Can these numbers improve? Of course, and they will. But what would it take for users to adopt FSD en masse? It needs to work better, frankly. A recent report points out that Tesla's Robotaxis are crashing more often than Waymo vehicles - and that's incorporating the fact that the Tesla Robotaxi still requires a safety operator sitting in the front seat.

Okay, so what about the Optimus robot? So far there isn't much to point to. Anything and everything Optimus related by this point has been speculation, or hand-wavy promises of a dystopian future being made by Elon.

It's going to be the biggest product of all time, bigger than cell phones, bigger than anything. There could be tens of billions of robots.

People often talk about eliminating poverty or giving everyone amazing medical care. There's only one way to do that, and that's with the Optimus robot... Optimus will actually eliminate poverty.

Bold claims. But are they true?

Read the Fine Print

Perhaps Elon does not need to meet these lofty objectives after all. Buried in the CEO award terms 8-K filing (Exhibition 10.2 Section III-C) is the following language regarding "covered events" - triggers that would allow Musk to earn shares without meeting the required operational milestones.

Covered events include natural disasters, wars, pandemics, and changes to 'international, federal, state and local law, regulations or other governmental action or inaction' that could hamper the company's ability to design, manufacture or sell its products down the line.

At the risk of misreading legalese, that certainly feels like a clause intentionally left open-ended to interpretation.

If the 100% tariff on Chinese-made electric vehicles is eliminated and BYD wipes out Tesla's market share, does that qualify as government action and eliminate the requirement for selling 10 million Tesla vehicles?

If FSD is never deemed legal for operation, due to government inaction, does that qualify as a covered event to disregard the FSD operational milestone?

Is it really so hard to believe the person who made an offer to buy Twitter, and then immediately try to illegally back out of the deal, would also try to abuse this verbiage in awarding himself more shares of Tesla stock?

Reaching for the Stars

With a market valuation of around $1.5 trillion today, Tesla is either an absurdly over-valued mid-sized car company, or an undervalued harbinger of a dystopian future. Investors must decide for themselves which version of our soon-to-be reality is the truth.

If it turns out Tesla cannot make good on its promises and is eventually forced to accept the reality of being just a decent electric car company, that P/E ratio, which is currently over 300, may return to the industry average of around 20 ... wiping out about 93% of the company's current valuation. That $440 share price could come down to $40. And even that embraces a willfull ignorance of the existential threat of a future where Chinese electric vehicles find their way into the United States.

How much longer do we expect Elon to keep the party going?