Is Musk's big payday make-or-break for the Tesla share price?

Is Musk's Big Payday Make-or-Break for Tesla’s Share Price?

How much is it really worth paying Elon Musk if he succeeds in lifting Tesla’s share price nearly six-fold over the next decade? The company’s stock (NASDAQ: TSLA) has already risen ahead of its annual shareholder meeting on Thursday, 6 November, where Musk’s proposed pay package — potentially worth up to $1 trillion — takes center stage.

The issue is not only about the staggering figure itself but also the fear that Musk might step away from Tesla if shareholders reject the deal. The CEO’s desire for control remains strong. As he stated:

“My fundamental concern … if I go ahead and build this enormous robot army, can I just be ousted at some point in the future?”

This proposed compensation isn’t a simple cash handout. It consists of a vast stock package, which will only reach its projected value if Musk meets a series of ambitious performance goals. If he succeeds within 10 years, Tesla’s market capitalization could soar to $8.5 trillion — more than five times its current valuation of around $1.5 trillion.

Some investors argue such a payout would be justified if Musk achieves those numbers. Among them is Ark Invest CEO Cathie Wood, who previously placed a $2,600 price target on Tesla by 2029 — a figure closely aligned with the market cap projection. Yet, not all shareholders agree. Norway’s sovereign wealth fund, holder of 1.2% of Tesla (or as Musk now frames it, “the robotics developer”), has publicly opposed the plan.

Author’s Summary

Elon Musk’s proposed $1 trillion Tesla pay deal splits investors between faith in his ambitious targets and anxiety over his potential departure.

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Fool UK Fool UK — 2025-11-06

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