Elon Musk Gets A Nice Pay Raise

We haven’t talked about Tesla (ticker: TSLA) in a while.

Elon Musk, Tesla’s CEO, made many headlines at the start of 2025.

And some of them weren’t good.

Musk was heading up DOGE (Department of Government Efficiency) for the Trump administration.

And it angered many Americans, especially potential Tesla customers who weren’t fans of the president.

At one point, Tesla stock was down over 50% from its highs last December.

In May, Musk stepped down from his role at DOGE to focus more attention on Tesla.

And the move has really paid off for Tesla investors.

Tesla’s stock is up 24% since Musk stepped down from DOGE in May.

Well, Musk is back in the news again.

But it has nothing to do with the government.

Tesla shareholders just voted to increase Musk’s compensation to $1 trillion.

Ummm… excuse me?

The new deal would triple Musk’s net worth, and he’s already the richest man in the world!

If you’re a Tesla investor, is the pay package good news or bad?

Let’s break it down.

Musk isn’t going to be paid $1 trillion every year.

It isn’t a salary, but rather stock option awards given for achieving certain milestones.

There are operational milestones for things like the number of Tesla cars delivered or the number of robotaxis being used.

But the biggest milestone has to do with Tesla’s stock price.

Tesla’s market cap currently sits at around $1.5 trillion.

If Musk is able to increase Tesla’s market cap to $8.5 trillion, he would receive another $1 trillion worth of Tesla stock.

And Musk must do it in the next 10 years.

I could write a lot about executive compensation.

Billions being paid to CEOs is money not going to shareholders.

Initially, I thought the $1 trillion pay package for Musk was crazy for Tesla stock owners.

But after digging into it, I realized it’s not such a bad deal after all.

For Musk to get the $1 trillion, Tesla’s stock price would have to rise to around $2,500.

It would be a 467% increase from its current price.

And Musk only has 10 years to do it.

But here’s the important part.

Tesla needs Musk more than Musk needs Tesla.

Musk has other companies he could focus on like SpaceX, xAI, and Neuralink.

So if the pay package wasn’t approved, Musk might have left Tesla to focus on some of his other companies.

And based on the price chart above, Tesla stock doesn’t do so well when Musk isn’t around.

So if you don’t own Tesla stock, now is a great time to buy some shares and see if Musk can pull it off.

Do you think the $1 trillion pay package is too much?

It’s a huge amount of money, so let me know what you think!