One of the world’s wealthiest men could get significantly richer.
Tesla has proposed a massive new stock-option compensation package for CEO Elon Musk that could net him up to $1 trillion.
The proposed incentive, detailed in a recent filing with the U.S. Securities and Exchange Commission, is tied to a bet that if Musk can increase the value of Tesla from $1 trillion to $8.5 trillion over the next 10 years, he will earn the compensation.
Chair of Tesla’s Board of Directors, Robyn Denholm spoke with Bloomberg Technology, defending the decision.
“Having the Board’s responsibility is to look at who the CEO is for the next period of time, and we believe that Elon is the right CEO for Tesla over this transformative period of time,” Denholm said. “And our view is he’s a generational leader.”
Denholm further explained that the scale of the compensation is necessary to achieve the goals.
“There aren’t any other people out there like Elon who can actually lead the company over this next decade or so,” she said. “And so, once you decide who the leader should be, you need to put in place the compensation package to incent and motivate him to actually deliver against the ambitious goals.”
The proposal follows a period of strong performance for the company.
Tesla’s stock surged over 30% in September, heading for its best monthly performance in nearly a year, Bloomberg reported. This recent ascent follows a drop earlier in the year and is driven by investor hope that Tesla will successfully transform into an artificial intelligence company developing robots and self-driving taxis.
“Clearly, from our perspective as a Board, we’re measuring him on results and measuring him on what he does as the CEO of Tesla,” Denholm said. “Our view is he’s delivered big time in the past, and we look forward to him doing that in the next era.”