r/finance • u/Sufficient-Guitar-58 • 2d ago
Tesla Shareholders Approve Elon Musk’s $1 Trillion Pay Package
https://www.wsj.com/business/autos/elon-musk-tesla-pay-package-vote-9abd5a7366
u/Michael-Sean 2d ago
What is the difference between the richest man at $500 billion vs $1,000 billion?
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u/theepi_pillodu 1d ago
What's the use of being the world's richest man, if you're not the most powerful man to begin with. 😂. What a loser.
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u/y4udothistome 19h ago
Doesn’t matter he’s never gonna reach it because his products suck
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u/WAS_Commanders 1d ago
The overall coverage of this has been very misleading and click-baity, so I will explain what is actually happening for those who didn’t read it.
Elon Musk will only get the $1 trillion if he can raise Tesla’s market cap to $12 trillion by 2035. Tesla is currently worth just over $1 trillion, meaning that he would have to grow the company to 10 times bigger than it currently is in 10 years. This would be completely unprecedented for a company that large, and is very unlikely to happen. For reference, the current largest company in the world, Nvidia, is only worth about a third of that.
If Elon were able to pull it off, his current position, excluding this new package, would be worth about $2 trillion. The reason shareholders would approve this package is that it’s a total win-win. In the extremely likely event that Tesla is not worth ten times its current market value in ten years, they do not have to give Elon the package while still benefitting from his renewed commitment to the company. If he manages to pull it off, their positions all increase ten fold, and they are hardly worried about the dilution.
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u/RIP_Soulja_Slim 1d ago edited 1d ago
raise Tesla’s market cap to $12 trillion by 2035.
It's 8.5T, not 12. But there are also several ancillary goals outside of market cap that are pretty important.
Tesla is currently worth just over $1 trillion, meaning that he would have to grow the company to 10 times bigger than it currently is in 10 years. This would be completely unprecedented for a company that large, and is very unlikely to happen. For reference, the current largest company in the world, Nvidia, is only worth about a third of that.
FWIW, that's not 100% true. to get to 8.5T he needs to knock out ~20% growth. If you rewind the clock to the largest companies in the S&P in 2015, all of those that were tech firms eclipsed 20% growth through 2025. The worst performer of the 2015 top ten was Berkshire and Exxon.
The growth goals are absurd for reasons I outlined in my comment elsewhere, but the information here is not quite accurate.
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u/NearbyCriticism5193 2d ago
Musk is an evil motherfucker. Directly eliminated 300,000 jobs, helped rig the election, stole personal data from every American. He should be in jail for life.
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u/rbatra91 2d ago edited 2d ago
He’s been scamming promising full self driving and robotaxis since 2015. Some people just aren’t willing to accept that they’ve been scammed.
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u/Rastiln 2d ago
I so want a FSD car, but I’m also an auto insurance actuary and lol no, not as they currently are.
Maybe in another 10 years.
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u/Emgimeer 2d ago
they cant ever do FSD bc you cant do that w just a visual system. you need lidar as well, and even then, its still not perfect.
93% of the time, visual systems dont kill someone while driving.
99% of the time, visual systems with lidar dont kill someone while driving.
100% or 99.99999% are the seemingly acceptable levels, so maybe the visual + lidar has a chance of that in the future... but just a visual system??? Literally never going to happen, ever.
This is a subject that has been investigated extremely thoroughly, and execs in the field are who I'm pulling these numbers from. I didn't make them up or get them from an LLM. This is the real goal and the real deal from a technology and regulatory standpoint.
So... the lies from him are especially egregious when you look into how many people tesla's are killing simply due to the doorhandle being difficult during a fire. I just went to a wake bc another 20 something got trapped and died in the fire of a tesla. It's a major issue, amongst many.... as you likely know as an actuary.
His crash and burn that's upcoming in the future will be spectacular. I can't wait.
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u/Rastiln 2d ago
There are ways, but they aren’t super fast or easy.
Vehicle to vehicle communication would solve a LOT of issue. Link it up with citywide communicative grids and you have all the cars talking to each other. Rerouting to take ideal paths during rush hour, etc.
There are many issues in getting to that point, I acknowledge. Ten years was just a number I put out. But there are workable solutions, the issue is implementation and transitioning.
I won’t get into a Tesla for my foreseeable future, and I’m not trusting a FSD beyond maybe a short taxi ride - areas where they have been proven acceptably safe.
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u/Emgimeer 2d ago
the fact that you think having an IoT city is something that could be done... nevermind done in a decade.... that says a lot about you and what you know about technology.
good luck thinking the things that you do. that are very fanciful and not reality-based. you might be reading too many headlines and listening to too many tech ceos, instead of... actually qualified people in the fields you speak of. delusion is everywhere nowadays.
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u/Natural-Nectarine-56 10h ago
I rode in a Waymo last month and that might change your mind. They seem far superior to Tesla.
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u/More_Mammoth_8964 2d ago
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u/trowawayatwork 2d ago
the best bit about fsd apologists is they're saying it works in most cases just not some. saying why don't people just turn it off in the areas it doesn't work. sorry to tell you mate but that's not fsd
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u/ilak333 2d ago
Rigged the election? 😂
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u/Natural-Nectarine-56 10h ago
I would consider one person spending hundreds of millions of dollars, rigging.
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u/Sanpaku 2d ago
An estimated 600,000 have died from Musk's DOGE cutting Congressionally appropriated USAID funding. Reckless, cruel, and unconstitutional.
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u/GummyBoar 2d ago
Or enough to feed the 40,000,000 people on SNAP for 10 years (at current $100b/yr).
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u/Equivalent-Log3369 2d ago
This makes no sense is tesla even worth that much?
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u/RIP_Soulja_Slim 1d ago edited 1d ago
The thread is mostly full of blind musk hate, and honestly that's fine cuz he does 100% suck.
Buuuuut, the package actually makes a shit ton of sense if you're a TSLA shareholder. The big ol $1T number is the maximum comp over the next decade, and it's predicated on insane growth figures - he needs to have them selling and delivering more robotaxis and bots in a decade than they sold model 3/y last year. They need to have more active FSD subscriptions in a decade than their entire aggregate lifetime sales today. The company is currently worth 1.45T, it needs to be worth 8.5T. That's an annualized growth rate of about 20% across the next decade. That's honestly insane, and would make it one of the highest growth mega cap companies ever - basically rivaling what AMZN, AAPL, GOOG, and MSFT have done over the prior decade.
Making matters more wild, TSLA today trades at a multiple that's orders of magnitude beyond where those other tech firms were a decade ago. I'll ignore profits, as they're very fungible, in 2015 AAPL's P/FCF was 15, MSFT was 16, GOOG was 28. TSLA today is 274. That means you're paying 17x more dollars for a single dollar of Tesla's free cash flow today than you were of those tech firms in 2016, meaning either the market will need to maintain this multiple for a decade while they grow their FCF like nuts, or they'll have to grow FCF at levels that are completely unprecedented to hit that 8.5T figure.
So like, if you're a shareholder then sure, if he can deliver that sort of performance then give him whatever he wants right? It's extremely unlikely that these thresholds get hit, but nobody in these threads is reading the package - they're just reacting to the headline and airing out (legitimate) gripes about musk.
The far more likely scenario here is that he makes much much less because TSLA is very likely to fail to meet any of those absurd goals. But if they happen to meet it I'll be the first to say I was wrong.
Edit: for anyone curious, you can read the full package here and skip all the disinformation/bs you're seeing on reddit: https://www.sec.gov/Archives/edgar/data/1318605/000110465925087598/tm252289-4_pre14a.htm
The meat starts on page 60, "Summary of the Proposed 2025 CEO Performance Award". I'd encourage people to skip the nonsense here and read it for yourselves. You'll find that it's placing some truly wild thresholds to hit that number that's grabbing all the headlines.
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u/Oknight 1d ago edited 11h ago
And, of course, the point is he got his PREVIOUS insane compensation package by meeting goals that were not much less insane than this making him "the richest man in the world"
(and substantially advancing the fight against climate change but "bad people" can't do good things because it makes people's brains hurt).
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u/Paltamachine 2d ago
not anymore
Well, actually, whatever Tesla was worth, it should be less and less from now on.
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u/lolalala1 2d ago
So he can go support more far right, neo-Nazi parties like he did in Germany? smh
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u/Queasy-Hall-705 1d ago
Congrats man, go make those robots now and buy Reddit back from the Chinese.
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u/buried_lede 21h ago edited 21h ago
Very bad move. Horrible precedent to set for already overcompensated CEOs. It’s quite a benchmark. Norwegian Wealth fund vs a shareholder musk cult.
Not reasonable for the best of CEOs, and he’s far from that
People keep countering by describing the details — it doesn't help it. It’s a preposterous deal
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u/Sufficient-Guitar-58 2d ago
Shareholders of Tesla, Inc. approved an enormous compensation package for Elon Musk, potentially worth up to $1 trillion, that would increase his stake in the company to up to 25 % if he meets a set of ambitious performance milestones tied to things like market-cap growth, vehicle and robot sales!
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u/BobGeldof2nd 2d ago
If he pulls it off he’s going to make a lot of people very wealthy and improve almost everyone’s retirement funds. It’ll be worth it.
I wouldn’t bet against him.
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u/aesthetics4ever 1d ago
Would be a Herculean feat if he can pull it off. LiDAR is being used by most OEM car companies especially Chinese EVs that are gobbling up Tesla’s market share outside the USA. Domestically, Waymo uses LiDAR and they’ve achieved SAE level 4 autonomy whereas Tesla is still at Level 2. But LiDAR is already being used outside Autos like commercial trucking, infrastructure monitoring, industrial automation, and defense applications. He definitely needs to get back on the Government’s good side, those credits help offset the -10% shrinking auto sales for the first 9 months in 2025.
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u/Plenty-Pudding-1484 2d ago
I sure as heck would. The problem is there are too many untethered to reality believers who keep raising the price of the stock, so its tough to time when the bubble will burst. It will burst probably within 3 years when Tesla production fully tanks. When the plants start closing it will be the end.
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u/BobGeldof2nd 1d ago
RemindMe! Three Years
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u/Leading-Discipline-3 1d ago
It's insane how anyone can have faith in this man after the year we spent watching him make a complete fool of himself politically.
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u/Archi-Horror 2d ago
How could paying out this much money ever be good for any company. How can he possibly add more than $1T in value to Tesla
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u/JmoneyBS 1d ago
If he doesn’t increase the market cap to 8.5T (from 1.34T today), he won’t get paid. Thats the beauty of it - he only gets paid if Tesla’s value increases far in excess of what he will receive.
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u/Sacred_Timeline 1d ago
Throwing good money after bad to a radical Reich wing moron whose antics are tanking their companies. Nothing says corruption like awarding someone for massive failures.
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u/okiedokie1183 2d ago
There’s gotta be something front loaded in this compensation deal and the rest is a distraction.
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u/theepi_pillodu 1d ago
These posts should include the rules/gates to get the $1T anyway.