Elon Musk could become the world's first trillionaire if Tesla shareholders approve a new proposal that would offer him a significant sum of money if the company achieves certain ambitious targets.
According to CNN, the proposed compensation package could give Musk an additional 423.7 million Tesla shares, which would be worth $143.5 billion at the current market value. However, Musk would only receive these shares if Tesla's market value were to increase significantly in the coming years. Specifically, the company's stock would need to reach a total value of $8.5 trillion for Musk to receive all of the shares, a figure significantly above the current market valuation of $1.1 trillion and roughly double the current value of Nvidia, which is currently one of the most valuable companies on the market.
The company’s proposed deal also includes an option for Tesla to take a stake in xAI, the private artificial intelligence company that Musk owns. The move could help consolidate his growing business empire. XAI recently acquired social media platform X (formerly Twitter), which Musk bought for $44 billion in 2022. The proxy statement did not provide a specific position on the shareholder proposal and did not specify the size or price of the stake Tesla would hold in xAI.
Elon Musk currently owns 410 million shares of Tesla, worth $139 billion at Thursday’s closing price. That portfolio, along with his stakes in xAI, SpaceX and other companies he founded and runs, makes him the world’s richest person, with a combined net worth of $378 billion, according to Bloomberg’s billionaires tracker. Musk also has the option to buy an additional 304 million Tesla shares, but a judge in Delaware has twice previously struck down a 2018 pay package that would have provided those options, deeming it illegal despite broad shareholder approval. If approved, Musk would own about 18% of Tesla’s stock. Tesla's stock price rose sharply between Election Day and mid-December 2024, nearly doubling as investors expected Musk's close ties with President Donald Trump to benefit the company. However, the company's struggles with protests, falling sales and declining profits have wiped out those gains. The stock has since recovered, but remains 26% below its December high.
Musk and his Wall Street backers believe Tesla is well-positioned for continued growth and significant profits in the future. He has continued to predict that plans for self-driving cars, including a robotaxi service, will create significant profits and shareholder value. The robotaxi service would provide rides to passengers and also allow Tesla owners to rent out their vehicles for driverless trips when they are not in use.
Musk has also promised a line of humanoid robots that could bring in even more revenue than Tesla's electric car business. So far, however, these have been mostly promises and projections, as the company faces stiff competition from Chinese electric vehicle makers such as BYD, which is expected to overtake Tesla in global electric vehicle sales. Tesla also faces competitors in the robotaxi service, including Waymo, an Alphabet unit that offers self-driving car ride-hailing services in partnership with Uber in some cities.
If shareholders approve the new package, Musk will face major challenges in achieving the ambitious goals, but he will also be on the path to becoming the world's first trillionaire.
