The board of U.S. electric vehicle giant Tesla on the 5th proposed a compensation and performance scheme, under which, if Tesla under the leadership of CEO Elon Musk achieves specified targets, Musk could become the world’s first $1 trillion (4.23 trillion ringgit) billionaire.
According to AFP, documents submitted to the U.S. Securities and Exchange Commission show that the Tesla plan, set for a 10-year period, must be approved by shareholders and, as stipulated, will grant Musk equity based on the company’s market value.
According to The Wall Street Journal, the maximum allocation under this scheme would be equivalent to 12% of Tesla’s shares, but this depends on whether Tesla can achieve various milestones, including the company’s market value reaching $8.5 trillion (35.92 trillion ringgit).
At a market value of $8.5 trillion, these shares would be worth just over $1 trillion.
Bloomberg reports that Tesla’s current market value is about $1 trillion, and this new massive compensation plan is unprecedented in U.S. corporate history.
According to documents Tesla submitted on the 5th, the additional shares Musk could receive would bring his stake in Tesla to at least 25%.
Tesla Chair Robyn Denholm stated in a letter to investors: "Retaining Elon and keeping him motivated is critical for Tesla... to become the most valuable company in history."
Denholm further pointed out that this compensation plan "aims to combine extraordinary long-term shareholder value with incentive measures, thereby driving our visionary leader to perform at his peak."