The plan allows Musk to receive up to 12% of Tesla's shares if he helps the electric vehicle company achieve a market capitalization of $8.6 trillion in the next 10 years. This means their market cap would have to increase almost 8 times its current value. At that point, Musk's 12% stake would be worth $1.03 trillion.

The billionaire has stated that the company's Optimus humanoid robot could contribute 80% of Tesla's value. He predicts the company's market value will reach $25 trillion thanks to Optimus.

Elon Musk in Washington on 20/1. Photo: AP

Elon Musk in Washington on 20/1. Photo: AP

A special committee of independent members of the board is reviewing the proposal. Shareholders will vote in November.

This proposal demonstrates the board's confidence in Musk's ability to steer the company in its new direction. Tesla is losing ground to Chinese competitors in key electric vehicle markets.

However, if Musk receives these shares as planned, his voting power will increase significantly. This could exacerbate the ongoing debate about corporate governance and succession planning at Tesla.

The electric vehicle company emphasized that Musk will continue to receive no salary or cash bonuses. His income is tied to achieving the company's business and market capitalization goals.

The world's richest man has consistently requested a larger shareholding to exert more control over the company, despite facing legal challenges with a compensation package approved in 2018. Under that agreement with shareholders, he received a compensation package including the option to purchase 304 million shares until 2028 if Tesla met certain business performance and market capitalization targets. These options were divided into 12 tranches.

Tesla shareholders approved the package twice, in 2018 and June 2024. However, a Delaware court twice ruled the package invalid last year. Judges deemed the payout "fantastical," unfair to shareholders, and creating uncertainty about Musk's future at the company. They asserted that Musk controlled the negotiation process for the compensation package.

Last month, Tesla granted Musk a new $29 billion compensation package to retain him as CEO as the company faces a turning point. Musk will receive this package if he continues as a senior leader for another two years and the court doesn't reinstate the 2018 package.

Musk currently has a net worth of $437 billion, according to Forbes. He transformed Tesla from an electric vehicle startup into the world's most valuable car company, scaling production, expanding globally, and advancing the electric vehicle industry as a whole. He also runs several other companies, including SpaceX and the artificial intelligence company xAI.

Ha Thu (Reuters)