Tesla (TSLA) board chair Robyn Denholm has made a strong case for Elon Musk’s proposed $1 trillion pay package. She told Bloomberg TV that Musk is a generational leader and the only person who can guide Tesla through its shift into artificial intelligence and robotics. The plan will go to shareholders for a vote at the company’s annual meeting on November 6.
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The package ties Musk’s rewards to performance goals. It includes 12 tranches that depend on Tesla reaching a market cap of $8.5 trillion, up from its current value of about $1.1 trillion. It also requires Tesla to hit operational milestones, such as delivering 20 million vehicles, putting one million robotaxis on the road, and building one million humanoid robots over the next decade. If all targets are met, Musk’s stake could rise from 13% to about 25%.
Meanwhile, Tesla shares closed up 7.36% on Friday at $395.94, although the stock is still down about 2% year-to-date.
Support and Criticism
The proposal has sparked a wide mix of responses. On one hand, some analysts see value in the plan. Morgan Stanley (MS) analyst Adam Jonas called it a good deal for Tesla shareholders, arguing that the size is modest when compared to the potential growth in robotics and autonomous driving. On the other hand, political figures and investor groups have pushed back. Senator Bernie Sanders described the package as grossly immoral, while New Mexico State Treasurer Laura Montoya, whose pension fund owns Tesla shares, labeled it unconscionable.
Security and Governance Factors
The board has also faced questions about Musk’s safety. Investors raised concerns after the recent assassination of commentator Charlie Kirk brought security risks into focus. Musk’s current security cost is about $3.3 million each year, which is far less than the $23.4 million that Meta Platforms (META) spends to protect CEO Mark Zuckerberg. Musk has said he will enhance security, and Denholm added that the board takes the matter very seriously.
In addition, the package requires Musk to stay with Tesla for at least 7.5 years. It also includes steps for a succession plan. If approved, it would replace his earlier $56 billion package, which a court in Delaware struck down.
Is TSLA Stock a Buy, Hold, or Sell?
Turning our attention to Wall Street, Tesla is still considered a Hold based on 33 ratings. The average price target for TSLA stock is $311, implying a 21.42% downside from the current price.
