Tesla makes Elon Musk’s new compensation package official

Max Headroom 2025.11.12 3 min read

Tesla has made CEO Elon Musk’s new compensation package official, as it filed a Form 4 with the Securities and Exchange Commission (SEC) on Monday.

The package officially gives Musk the opportunity to acquire over 423 million shares of Tesla stock (NASDAQ: TSLA), dependent on his ability to achieve twelve performance-based tranches that will bring growth to the company and its shareholders.

Tesla (TSLA) shareholders officially approve Elon Musk’s 2025 performance award

Musk’s new compensation package was approved by investors last Thursday at the company’s Annual Shareholder Meeting, as over 75 percent of voters supported the CEO’s new plan, which could be valued at over $1 trillion if he is able to come through on all twelve tranches.

The twelve tranches include growth goals related to vehicle deliveries, the Optimus humanoid robot project, and Tesla’s valuation. If Musk is able to achieve each tranche, he would help Tesla achieve an over $8 trillion market cap.

The 12 tranches include:

$2 trillion market cap + Deliver 20 million Tesla vehicles cumulatively
$2.5 trillion market cap + Reach 10 million active Full Self-Driving (FSD) subscriptions
$3 trillion market cap + Deliver 1 million Optimus humanoid robots
$3.5 trillion market cap + Operate 1 million Robotaxis commercially
$4 trillion market cap + Hit $50 billion in adjusted EBITDA (earnings before interest, taxes, etc.)
$4.5 trillion market cap + Hit $80 billion in adjusted EBITDA
$5 trillion market cap + Hit $130 billion in adjusted EBITDA
$5.5 trillion market cap + Hit $210 billion in adjusted EBITDA
$6 trillion market cap + Hit $300 billion in adjusted EBITDA
$6.5 trillion market cap + Hit $400 billion in adjusted EBITDA
$7.5 trillion market cap + Hit $400 billion in adjusted EBITDA for four straight quarters in a row
$8.5 trillion market cap + Hit $400 billion in adjusted EBITDA for four straight quarters in a row

Achieving the twelve levels of the new compensation package would also give Musk what he’s really after: a larger ownership share in Tesla, which would help him achieve more control, something he feels is necessary for the rollout of the Optimus robot “army.”

Musk does not earn a dime if he does not achieve any of the tranches above.

This is an important thing to note, as much of the media coverage regarding Musk’s pay package seems to indicate that the company and the shareholders are simply giving the CEO the money. He has to come through on each of these tranches to unlock the $1 trillion.

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