Elon Musk Could Earn Billions from Tesla Even Without Hitting His Grandest Goals
What if someone could make tens of billions of dollars — even without achieving the near-impossible goals laid out for them? That’s the controversy swirling around Elon Musk’s record-breaking Tesla pay package, a compensation plan so massive and complex that some experts say it rewards him richly even if he falls short of transforming Tesla into the world-changing powerhouse envisioned by its board.
Lofty Promises, Modest Requirements
When Tesla’s board unveiled Musk’s latest compensation proposal in September — the largest ever offered to a corporate executive — it assured investors that he would need to accomplish what they called “Mars-shot” missions to earn up to $878 billion in stock over the next decade. These targets include revolutionizing autonomous vehicles, robotics, and Tesla’s overall value. In theory, Musk would receive nothing unless these audacious goals were reached.
But here’s where it gets controversial. A Reuters investigation, backed by over a dozen industry experts, found that Musk could still walk away with over $50 billion even if he achieves only the easier targets — ones that may not fundamentally transform Tesla or its technology. Hitting just a couple of low-bar milestones, combined with modest stock growth, could bag him $26 billion — more than the combined lifetime pay of the next eight highest-paid CEOs in the U.S., including Mark Zuckerberg, Larry Ellison, Tim Cook, and Jensen Huang.
Easy Wins Worth Billions
Musk’s vehicle sales targets are surprisingly achievable. Multiple auto analysts noted that if Tesla sells an average of just 1.2 million cars annually over the next decade — half a million fewer than its 2024 sales — he could still cash in around $8.2 billion, assuming Tesla’s market value rises mildly to $2 trillion by 2035. That’s below-average growth by Wall Street standards.
To reverse slowing demand, Tesla recently introduced lower-cost versions of its Model Y SUV and Model 3 sedan — a move meant to spark sales. Yet even modest success in these areas might hand Musk astronomical sums of money.
In addition, several of Musk’s product-development targets are written with such vague language that, according to robotics and autonomous-driving analysts, they could trigger huge payouts without clearly measurable progress. This ambiguity could make it easier for Musk to claim victory even if results fall short of public expectations.
Ambiguous Milestones: Self-Driving, Robotaxis, and Robots
The package ties 1% of Tesla stock to each major milestone, provided the company’s market valuation hits between $2 trillion and $8.5 trillion. One key goal is reaching 10 million subscriptions to Tesla’s “Full Self-Driving” (FSD) software — technology that, despite its name, still requires human intervention. The criteria don’t demand true autonomy, just an “advanced driving system,” a phrase with no established meaning in automotive regulation.
Legal expert William Widen calls that a “made-up term,” leaving plenty of wiggle room. And since Tesla could boost subscriptions by slashing prices — currently about $8,000 per car or $99 per month — the milestone may not even hinge on technological breakthroughs.
Another target involves deploying one million robotaxis, supposedly vehicles “without a human driver in the vehicle.” Sounds ambitious — but analysts note that wording could still allow remote or in-car monitoring by humans, similar to Tesla’s early robotaxi operations in Austin, Texas.
Then there’s the “one million robots” requirement — apparently referring to the long-promised Optimus humanoid project. Yet the term “bot” is defined so loosely that it could also cover non-humanoid machines. Two robotics experts labeled the language “intentionally open-ended,” suggesting it could be met with far simpler devices than investors expect.
Billions for Modest Wins
If Tesla meets just two product milestones and achieves a relatively attainable $2.5 trillion valuation, Musk would earn $26.4 billion. Adding one more milestone and a $3 trillion valuation doubles his reward to over $54 billion — all without delivering fully autonomous Teslas or robot fleets.
And this is the part most people miss: investors may reward Musk even if the products fall short, because they still credit him with visionary leadership. Yet some analysts warn this creates a dangerous precedent — tying one company’s entire future to a single individual.
A Dangerous Bet on One Man
Tesla’s board justifies this massive wager by describing Musk as uniquely capable of leading the company’s AI and robotics transformation. They claim that during negotiations, Musk hinted he might prioritize other ventures if he didn’t secure the compensation he wanted. Some governance experts see this as an alarming concentration of power. As Wei Jiang of Emory University put it, giving one leader a “monopoly” on a CEO role violates the principles of healthy corporate competition.
The Real Test: Profitability
The biggest challenges lie in Musk’s profit-based goals — the kind that can’t be finessed with clever wording. Tesla’s board set eight earnings milestones ranging from $50 billion to $400 billion in EBITDA, compared to about $16.6 billion in 2024. Considering Tesla’s aging product lineup and cooling demand — with its highly anticipated Cybertruck underperforming — hitting these targets could prove extremely difficult.
However, Tesla’s structure allows for immense payout potential even without profit growth. Because all goals reward the same 1% in stock, Musk could earn just as much for hitting easy sales or subscription goals as for achieving fivefold profit growth. That design alone has sparked ethical debates among executive pay experts.
Valuation Goals May Be Easier
Tesla’s valuation targets may be easier to hit than its profit ones. If its shares rise merely 6.4% annually, it could surpass $2 trillion within a decade — slower than the average S&P 500 growth rate but still sufficient for Musk’s next tranche of rewards. Morningstar analyst Seth Goldstein even suggested Tesla might reach $3 trillion in value with average market performance, though much of that worth already reflects optimism about products that don’t yet exist.
Shareholder Faith and Musk’s Legacy
To unlock the truly massive paydays, Tesla will eventually need tangible results — real autonomous vehicles, robots, and revenue. Experts like USC finance professor Kevin Murphy note that while some milestones aren’t “much of a stretch,” shareholders tolerate them because they view Musk as a once-in-a-generation visionary. Whether the bet pays off or implodes, it reflects a profound faith in his ability to redefine what’s possible.
But is that faith justified? Should one executive wield so much influence — and earn so much — even when success hinges on loosely defined goals? Tell us what you think: Is Elon Musk’s staggering Tesla pay plan a fair reward for extraordinary ambition, or an unchecked experiment in corporate excess?
