Tesla seeks to award Elon Musk $1tn if carmaker hits formidable targets
Billionaire would need to hit a series of market value and profit goals to earn payout
Tesla’s board has proposed a new pay package for chief executive Elon Musk worth $1tn over the next decade if he is able to hit a series of formidable targets.
Musk will receive no salary or bonus under the plan unveiled on Friday, but would collect shares in instalments unlocked by increases in Tesla’s market value, combined with milestones including a huge increase in earnings and selling millions of cars, robotaxis and artificial intelligence-powered robots.
“Retaining and incentivising Elon is fundamental to Tesla . . . becoming the most valuable company in history,” chair Robyn Denholm said in a letter to investors. The package is “designed to align extraordinary long-term shareholder value with incentives that will drive peak performance from our visionary leader”.
The board stressed that Musk’s incentives were aligned with investors’ interests and he will receive nothing if Tesla’s growth stalls. However, the sheer scale of the deal is likely to revive a fierce debate over the earnings of the world’s richest man.
Musk’s 2018 Tesla pay deal was struck down by a Delaware judge after a protracted court battle. He has already amassed a $374bn fortune from his stake in Tesla and private holdings in SpaceX, xAI, Neuralink and The Boring Company.
Musk has repeatedly raised the prospect of reducing his commitment or even leaving Tesla if he is not given greater voting rights.
Achieving the maximum payout of 423mn shares will be extremely challenging. Musk would have to boost Tesla’s market capitalisation to $8.5tn from $1.09tn today. That is more than twice that of Nvidia, currently the most valuable company in the world at $4.2tn.
Tesla must also sell 12mn more electric vehicles; reach 10mn autonomous driving subscriptions; register and operate 1mn cars in its Robotaxi network; sell 1mn AI robots and increase adjusted earnings 24-fold to $400bn.
Those top-end targets appear distant considering Tesla’s adjusted earnings were $16.6bn last year; it has sold only 8mn cars to date, zero robots or robotaxis, and comparatively few so-called Full Self-Driving subscriptions.
The first valuation milestone is $2tn. If Musk fails to double Tesla’s valuation over the 10-year period of the plan, he will receive nothing.
The market cap targets then ratchet up in $500bn and $1tn increments to $8.5tn. When each level is hit, it must be paired with one of the other earnings or sales targets to activate a tranche of shares.
There are multiple earnings before interest, taxes, depreciation and amortisation targets that also escalate in stages, starting at $50bn and rising to a maximum of $400bn.
Each of the 12 levels is worth 1 per cent of Tesla stock, each equivalent to about 35mn shares. If a valuation level is achieved, married with a second profit target and sustained for six months, Musk will gain and retain the voting rights of the shares.
However, he cannot sell that stock for seven-and-a-half years and must negotiate with the board before making any large disposals to reduce volatility in the stock price.
Towards the end of the 10-year timescale of the plan, when he is 64 years old, Musk must “participate in the board’s continued development of a framework for long-term CEO succession”, the proposal states.
To hit his targets, Musk will have to reverse a slide in Tesla’s share price, which has fallen 30 per cent since mid-December. Sales have plunged amid a consumer backlash against Musk’s divisive political activism and investor concern about his rift with President Donald Trump, who has cancelled numerous EV and solar incentives.
The structure echoes Musk’s deal from 2018, which was also thought to be unachievable, but that paid out in full after Tesla’s value grew from $59bn to exceed $650bn. That netted Musk $56bn in stock options, the largest pay award in history.
However, the controversial package was struck down by a Delaware judge last year who ruled its size was excessive and the board was too close to Musk after a seven-year court battle.
Tesla has appealed to the state’s supreme court and moved its incorporation to Texas.
With the case still pending, Tesla last month awarded Musk 96mn shares worth about $30bn in what it described as a “good faith” interim payment. That has increased his ownership from 13 per cent to 16 per cent. The interim payment will be voided if the 2018 package is reinstated, which would boost Musk’s stake to about 20 per cent.
If the entire 2025 package is activated and Tesla wins the Delaware appeal, Musk’s control would rise to 32 per cent. However, after taxes and dilution, that would end up at about 25 per cent of the votes, a person familiar with the structure told the Financial Times.
Musk has argued that without at least a fifth of the shares he could be vulnerable to activist investors or a takeover, which is dangerous as it develops powerful AI technology and millions of robots.
The board will ask shareholders to vote on the new package at its November 6 annual meeting in Austin, Texas. If Tesla wins more than 50 per cent of votes cast, 423mn additional shares will be issued on top of the 3.2bn outstanding.
Musk and his brother Kimbal, who is on the board, are allowed to vote under Texas laws, whereas they have had to recuse themselves in prior matters about his pay.
Gapping up
In reaction to earnings/guidance:
In reaction to earnings/guidance:
- BRZE +18.5%, GWRE +13.9%, ZUMZ +13.8%, IOT +12.3%, AVGO +10.7%, TTAN +10.7% (also partnership with Roto-Rooter), DOCU +7%, PATH +5%, BBCP +4.3%, ZGN +3.2%, SWBI +2.2%
Other news:
- BNTX +13% (BioNTech and DualityBio announce Phase 3 Trial of ADC candidate BNT323/DB-1303 met primary endpoint of progression free survival in HER2-positive metastatic or unresectable breast cancer)
- BILL +8.4% (Starboard takes sizeable position; activist campaign could follow, according to Reuters; issues statement on engagement with Starboard Value)
- NFGC +5.8% (New Found Gold Corp. and Maritime enter into definitive agreement to combine)
- MYGN +5.7% (Announces Precise MRD Clinical Data Published in The Lancet Oncology)
- MIR +5.4% (to join S&P SmallCap 600)
- HCM +4.8% (Highlights Clinical Data to be Presented at the 2025 World Conference of Lung Cancer and the CSCO Annual Meeting 2025)
- CLPT +3.8% (FDA clearance for Nuero Laser Therapy System)
- VZLA +3.6% (enters $220 mln project finance mandate with Macquarie to fund development of the Panuco Project)
- CGON +3.4% (announces updated data on BOND-003 Cohort C)
- DEFT +3.3% (files base shelf prospectus)
- PONY +2.9% (partners with Mowasalat to deploy Robotaxi in Doha, Qatar)
- MAX +2.7% (repurchases 3.23 mln shares in private transaction)
- OKLO +2.5% (plans fuel recycling facility as first phase of up to $1.68 billion advanced fuel center in Tennessee)
- BMNR +2.4% (issues statement on NYSE American listing and access to Capital Markets) API +2.1% (expanded support for OpenAI's Realtime API)
- TRTX +1.8% (authorizes new $25 mln share repurchase program)
- TSLA +1.8% (files 2025 Proxy Statement asking shareholders to approve the 2025 CEO Performance Award)
- CIFR +1.5% (August Bitcoin production and operations update)
- MARA +1.5% (August Bitcoin production)
- SG +1.4% (CFO retires, names new CFO)
- AIR +1.1% (awarded new contract by Defense Logistics Agency)
- EWZ +1.1% (proposes to create area of free and safe data flows between the EU and Brazil)
- RGNX +1.1% (data from the Phase I/II/III CAMPSIITE trial of clemidsogene lanparvovec)
- COHR +1% (announces debut of its EDGE FL30 fiber laser)
- CRNC +0.9% (files patent infringement lawsuit against Apple)
Gapping down
In reaction to earnings/guidance:
In reaction to earnings/guidance:
- LULU -19.1%, AOUT -18.3%, NX -16.4%, CURV -12.7%, LFVN -12.4%, PHR -8.7% (also to acquire AccessOne), AGX -6.7%, AMBQ -4.2%, ABM -2.7%, CPRT -2.2%
Other news:
- DNA -4.3% (entered into $100 mln Sales Agreement in one or more at-the-market offerings)
- FFAI -2.6% (Announces its Annual 919 Futurist Day & Shareholders' Day on September 19)
- OBIO -1.1% (presents AVIM Therapy clinical data)
- SFD -0.9% (prices secondary offering of 19,531,698 shares of common stock sold by SFDS UK Holdings at $23.25 per share)
- ZEPP -0.9% (acquires core assets of Wild.AI)
OpenAI announces AI-powered hiring platform to take on LinkedIn
OpenAI says it’s developing an AI-powered hiring platform to connect businesses and employees, a service that would put the outfit in close competition with LinkedIn. The product is called the OpenAI Jobs Platform, and the company expects to launch the service by mid-2026, an OpenAI spokesperson told TechCrunch.
OpenAI CEO of Applications Fidji Simo announced the new endeavor in a blog post Thursday, saying the company will “use AI to help find the perfect matches between what companies need and what workers can offer.” Simo said the service would offer a dedicated track for small businesses and local governments to access top AI talent.
OpenAI is interested in expanding into several new markets beyond its core consumer offering, ChatGPT. At a recent dinner with reporters, OpenAI CEO Sam Altman said that Simo would oversee several applications beyond the chatbot. This will apparently include the OpenAI Jobs Platform and potentially other offerings OpenAI is reportedly working on, such as a browser and a social media app.
Notably, OpenAI’s hiring platform could put the company in direct competition with LinkedIn, which was co-founded by Reid Hoffman, one of OpenAI’s earliest investors. LinkedIn is also owned by Microsoft, OpenAI’s largest financial backer.
In the last year, LinkedIn has worked to infuse its platform with AI features to help match job candidates with businesses.
OpenAI also says it will start offering certifications for people with different levels of “AI fluency” through its OpenAI Academy, an online program the company launched last year. An OpenAI spokesperson says the company plans to launch a pilot of OpenAI Certifications in late 2025.
Many tech executives have raised concerns that AI will disrupt numerous traditional jobs. Anthropic CEO Dario Amodei has said that AI could eliminate up to 50% of entry-level white-collar jobs before 2030. In her blog post, Simo acknowledged that risk, saying OpenAI can’t prevent that disruption. However, she says the company can do its part by helping people become fluent in AI and connecting them with companies that need their skills.
The ChatGPT maker says it’s working with Walmart, one of the biggest private employers in the world, on its certification program and aims to certify 10 million Americans by 2030.
OpenAI says it’s launching these programs as part of its commitment to the White House’s initiative to expand AI literacy. Altman and other Big Tech executives are meeting with President Donald Trump at the White House on Thursday to discuss AI.
>>> Up
* Amazon Raised to Buy at Punto Casa de Bolsa
* ASML Raised to Buy at UBS
* Avantium Raised to Hold at Kepler Cheuvreux; PT 13.50 euros (++)
* Enento Group Raised to Accumulate at Inderes; PT 17 euros
* Generali Raised to Outperform at Mediobanca SpA; PT 37 euros
* HarbourVest Global Raised to Overweight at Barclays
* HSBC Raised to Outperform at BNPP Exane; PT 1,100 pence
* Huber+Suhner PT Raised to 140 Swiss francs at UBS (++)
* MFE Raised to Buy at Equita; PT 5 euros (+)
* QPR Software Raised to Reduce at Inderes; PT 58 euro cents
* Sartorius Raised to Buy at Stifel; PT 230 euros
* SGS Raised to Outperform at BNPP Exane; PT 98 Swiss francs (+)
* STMicro Raised to Outperform at BNPP Exane; PT 26 euros
* STMicro ADRs Raised to Outperform at BNPP Exane
>>> Down
* STMicro ADRs Raised to Outperform at BNPP Exane
>>> Down
* Abivax Cut to Hold at Portzamparc; PT 63 euros (+)
* Admiral Cut to Sell at Peel Hunt; PT 2,350 pence
* Apax Global Alpha Cut to Equal-Weight at Barclays; PT 165 pence
* BioArctic Cut to Sell at Nordea; PT 220 kronor
* BioMerieux Cut to Neutral at Invest Securities SA; PT 124 euros (++)
* DKSH Cut to Underperform at BNPP Exane; PT 55 Swiss francs
* Genus Cut to Hold at Kepler Cheuvreux; PT 2,700 pence (++)
* HgCapital Cut to Equal-Weight at Barclays; PT 570 pence
* Jet2 PT Cut to 1,800 pence from 1,920 pence at Panmure Liberum (+)
* NatWest Cut to Underperform at BNPP Exane; PT 520 pence
* NatWest Cut to Underperform at BNPP Exane; PT 520 pence
* NB PE Partners Cut to Underweight at Barclays; PT 1,510 pence
>>> Initiation
* Hermes ADRs Rated New Outperform at BNPP Exane; PT $326.60
>>> Initiation
* Hermes ADRs Rated New Outperform at BNPP Exane; PT $326.60
* Ralph Lauren Rated New Buy at William O'Neil
* Ninety One Rated New Buy at SBG Securities; PT 221 pence (+)
* Sixt Rated New Buy at UBS; PT 102 euros (+)
>>> Call
>>> Call
* Admiral Falls After Cut to Sell at Peel Hunt; PT 2,350 pence (++)
* ASML Raised to Buy at UBS; Says Negative Factors Priced In (+)
* Sanofi Selloff Overdone, Valuation Highly Attractive: Berenberg (+
* Sixt New Buy at UBS on Margin Recovery, US Market-Share Gains
* Sixt New Buy at UBS on Margin Recovery, US Market-Share Gains
Research Calls
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Upgrades
- ASML (ASML) upgraded to Buy from Neutral at UBS
- Crown Holdings (CCK) upgraded to Buy from Hold at Truist, tgt $118
- Duluth Holdings (DLTH) upgraded to Outperform from Neutral at Robert W. Baird, tgt $7
- Healthcare Realty Trust (HR) upgraded to Outperform from Sector Perform at Scotiabank, tgt $20
- State Street (STT) upgraded to Buy from Neutral at Citigroup, tgt $130
- ASML (ASML) upgraded to Buy from Neutral at UBS
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Downgrades
- BYD (BYDDY) downgraded to Hold from Buy at Erste Group
- Credicorp (BAP) downgraded to Hold from Buy at HSBC, tgt $255
- FirstCash (FCFS) downgraded to Hold from Buy at Loop Capital, tgt $145
- J.B. Hunt Transport Services (JBHT) downgraded to Neutral from Buy at UBS, tgt $157
- Knight-Swift (KNX) downgraded to Neutral from Buy at UBS, tgt $51
- Lululemon Athletica (LULU) downgraded to Neutral from Buy at BofA Securities, tgt $210
- Lululemon Athletica (LULU) downgraded to Perform from Outperform at Oppenheimer
- Lululemon Athletica (LULU) downgraded to Market Perform from Outperform at Telsey Advisory, tgt $200
- Lululemon Athletica (LULU) downgraded to In Line from Outperform at Evercore ISI, tgt $180
- Lululemon Athletica (LULU) downgraded to Market Perform from Outperform at William Blair
- Lululemon Athletica (LULU) downgraded to Hold from Buy at Stifel, tgt $205
- NiSource (NI) downgraded to Hold from Buy at Jefferies, tgt $44
- Schneider National (SNDR) downgraded to Neutral from Buy at UBS, tgt $26
- BYD (BYDDY) downgraded to Hold from Buy at Erste Group
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Others
- Avalo Therapeutics (AVTX) initiated with a Buy at TD Cowen
- Blue Owl Capital (OBDC) initiated with a Buy at Clear Street, tgt $15
- Blue Owl Technology Finance (OTF) initiated with a Hold at Clear Street, tgt $15
- Capital Southwest (CSWC) initiated with a Hold at Clear Street, tgt $22
- Chagee Holdings (CHA) initiated with a Neutral at Macquarie, tgt $19
- Crescent Capital BDC (CCAP) initiated with a Buy at Clear Street, tgt $16.50
- Dolby Laboratories (DLB) initiated with a Neutral at Robert W. Baird, tgt $74
- Duolingo (DUOL) initiated with a Neutral at Robert W. Baird, tgt $280
- Enerpac Tool Group (EPAC) initiated with a Buy at Roth Capital, tgt $48
- Eos Energy Enterprises (EOSE) initiated with a Hold at Jefferies, tgt $6.50
- ESAB (ESAB) initiated with a Buy at Roth Capital, tgt $150
- Fannie Mae (FNMA) initiated with a Neutral at B. Riley, tgt $10
- Fidus Investment (FDUS) initiated with a Buy at Clear Street, tgt $21
- Gladstone Capital (GLAD) initiated with a Hold at Clear Street, tgt $25.50
- Gladstone Investment (GAIN) initiated with a Buy at Clear Street, tgt $14.50
- Great Elm Capital (GECC) initiated with a Buy at Clear Street, tgt $11.50
- Hinge Health (HNGE) initiated with a Neutral at Robert W. Baird, tgt $56
- Karman Holdings (KRMN) initiated with a Strong Buy at Raymond James, tgt $100
- Lincoln Electric (LECO) initiated with a Buy at Roth Capital, tgt $279
- Lionsgate Studios (LION) initiated with an Outperform at Robert W. Baird, tgt $8
- Omada Health (OMDA) initiated with a Neutral at Robert W. Baird, tgt $24
- QXO Inc. (QXO) initiated with an Outperform at Raymond James, tgt $28
- Revolution Medicines (RVMD) initiated with a Buy at Truist, tgt $99
- Runway Growth Finance (RWAY) initiated with a Hold at Clear Street, tgt $11
- Saratoga Investment (SAR) initiated with a Hold at Clear Street, tgt $24
- Sixth Street Specialty Lending (TSLX) initiated with a Hold at Clear Street, tgt $22
- Starz Entertainment (STRZ) initiated with a Neutral at Robert W. Baird, tgt $13
- State Street (STT) assumed with a Buy at Citigroup, tgt $130
- TKO Group (TKO) initiated with an Outperform at Robert W. Baird, tgt $225
- TJX Companies (TJX) reinstated with a Buy at Erste Group
- Twilio (TWLO) initiated with a Buy at Rosenblatt, tgt $140
- UiPath (PATH) assumed with a Neutral at DA Davidson, tgt $12
- Waystar Holding (WAY) initiated with an Outperform at Robert W. Baird, tgt $44
- Avalo Therapeutics (AVTX) initiated with a Buy at TD Cowen
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Gapping up:
- BRZE +18.9%, GWRE +13.9%, IOT +11%, TTAN +10%, AVGO +9.6%, API +9.1%, ZUMZ +8.9%, BILL +8.8%, DOCU +8.1%, MIR +5.8%, PATH +5.8%, HCM +5.3%, EMX +4.7%, BBCP +4.3%, DEFT +4%, CLPT +3.8%, BMNR +3.6%, SG +2.9%, PONY +2.9%, MAX +2.7%, OKLO +2.7%, MARA +1.8%, TRTX +1.8%, VZLA +1.4%, COHR +1.3%, CIFR +1.2%, EWZ +1.1%
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Gapping down:
- LULU -17.9%, LFVN -16.6%, NX -14.9%, CURV -12.7%, MYGN -11.5%, PHR -11.1%, AGX -6.2%, AMBQ -4.2%, FFAI -3.7%, CPRT -2.7%, SFD -1.5%, ZEPP -1.3%, OBIO -1.1%, HHH -0.9%, DNA -0.9%, AIR -0.8%