You probably have heard that Tesla shareholders have approved a pay package that could make Elon Musk a trillionaire.
And, of course, you have probably seen all the performative outrage from liberals about how this is just another example of America developing a new oligarchy, where the rich get richer and the poor get poorer.
Well, I have to admit that the pay package, should all the requirements be met, would make an astonishingly wealthy man even wealthier.
Imagine waiting to paragraph 5 to explain it. How about headline, Musk to get a $1 trillion if Tesla worth increases by $7 Trillion.
— Brian Loftus (@briandloftus) November 7, 2025
But only if he makes shareholders even wealthier, too.
Tesla shareholders approved a pay package on Thursday that could make CEO Elon Musk, already the world’s richest person, the world’s first trillionaire.
Tesla announced that more than 75% of shares voted in favor of the pay package during the company’s annual shareholder meeting. The vote didn’t include the 15% of the company that Musk already owns.
The crowd at the meeting broke into cheers and chants when the results were announced. Musk thanked the shareholders and the Tesla board soon after. “I super appreciate it,” he said.
Musk doesn’t take any salary, but the approved pay package comes in the form of a stock grant that would give him as much as 423.7 million additional Tesla shares over the next 10 years.
I actually do believe that the current way that CEOs are compensated at most companies is the product of a broken system. CEOs sit on each other's boards, vote for outrageous pay packages with golden parachutes, and often get wildly ridiculous compensation whether they perform well or not.
But the Tesla compensation package makes a lot of sense. 100% of Elon Musk's compensation is not only tied to performance, since he takes no salary, but the seemingly outrageously high level of compensation is based entirely on producing outlandishly spectacular financial results.
That "trillion-dollar "pay package, which is really shares awarded to him based on performance metrics, only materializes if he delivers wildly more value to shareholders than he reaps for himself.
Those shares could be worth about $1 trillion, assuming the company reaches the $8.5 trillion market cap needed to have Musk qualify for the full potential payout. In addition, Tesla needs to achieve a series of either operational or financial targets for him to get the full number of shares, which would be distributed in 12 equal blocks.
Getting all the shares available under this package over the next 10 years would be the equivalent of earning $275 million a day, dwarfing any other executive pay package in history.
Lofty targets for stock growth
For Tesla to reach the $8.5 trillion in market value needed, shares need to jump 466% from today’s stock price. That’s also about 70% higher than the world’s most valuable company, Nvidia, which hit a record $5 trillion market cap last week.
Suddenly, it makes more sense that 75% of the voting shares approved the pay package. Generally speaking, stockholders wouldn't want to transfer wealth that would go to them over to the man managing the company without a good reason, and that reason is simple: having Elon Musk as CEO of the company means ridiculously outsized profits for them, too. If Elon leaves, they fear Tesla will lose momentum.
And...if Elon doesn't deliver, they don't lose anything, since the compensation is contingent on performance. It's not like stockholders are on the hook for $125 million/year salaries plus bonuses to a CEO who fails to deliver, as can happen at other companies.
Ironically, it wasn't the "oligarchs" at investment firms who made this pay package; many of them hated it. Some supported it, others opposed. Retail shareholders put it over the top.
Musk's interest in acquiring more shares is, I suspect, less about money and more about control. If he meets all the goals, which would be a miracle, it would boost his share of the company to about 30%. Musk doesn't exactly use his wealth to live the high life—if you know anything about him, he lives relatively frugally, and when push comes to shove, he will literally sleep in the factory.
He lives in a prefab 375-square-foot tiny home on the SpaceX Starbase in Boca Chica. Probably the biggest budget item to maintain his lifestyle is the security detail he needs because he is a target.
Musk's goal is to transform the world, not live the high life, and the means he needs to accomplish his goal is lots and lots of money. Getting to Mars is not cheap, which is why no government has accomplished the task yet, and in all likelihood, no government will before Elon does.
You may think that is a stupid goal—or not. But that is what he is shooting for, and enough people are backing him through voting with their dollars that it is likely that this will happen.
In other words, this is not a tale of greed, at least on Musk's part. His shareholders believe that they will get more out of the deal than Musk. Musk expects that he will spend his wealth achieving something great for mankind, doing something no government on Earth has been able to do, better, faster, and cheaper.
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