The most expensive "emperor of wage earners" in history. How many steps does it take for Elon Musk to unlock a $1 trillion salary?
$1 trillion.
You read that right. This isn't the total economic output of a small country, but rather a "super bonus package" that Tesla plans to give to its boss, Elon Musk.
Recently, Tesla's board of directors announced a jaw - dropping proposal: They designed an unprecedented compensation plan for Musk. If Musk can lead the team to complete a series of "almost impossible" tasks in the next decade, he could receive rewards worth up to $1 trillion. This is definitely the most generous executive incentive plan in the history of American companies.
According to the proxy statement filed by Tesla last Friday, the additional shares Musk might receive would increase his stake in Tesla to 25%. Musk has previously publicly stated that he hopes to achieve this stake. Shareholders are scheduled to vote on these proposals on November 6.
Of course, this money isn't easy to get. There's no such thing as a free lunch, especially such a huge sum. Tesla has set a series of outrageously high goals for Musk, such as expanding Tesla's robotaxi, FSD, and robot businesses, and increasing the market value from the current approximately $1 trillion to at least $8.5 trillion.
So, the question is: How can this $1 trillion go from a seemingly impossible dream into Musk's pocket? Let's do the math and see how Musk can turn this dream into reality.
01 Building cars is not the end, but a ticket to the future
You can imagine it as a "hell - level" obstacle - course game tailored for Musk himself. The entire plan needs to be completed within ten years and is divided into 12 major levels. Only by clearing each level can he unlock a portion of the equity rewards.
To open the "treasure chest" of each level, two keys need to be turned simultaneously; neither can be missing.
The first key: Company market value
This key is straightforward. It means making Tesla bigger. The starting target is $2 trillion (about twice the current value), and then, like climbing stairs, it increases by $500 billion per level, ultimately reaching an astonishing $8.5 trillion. What does this mean? It's equivalent to adding another "Amazon + Google" on top of the current Tesla.
The second key: Solid performance
Relying solely on inflating the stock price won't work; there must be real - world business to support it. This second key represents the "milestones" that Tesla's four core businesses must achieve, each of which seems to be pushing the limits:
Sell an additional 12 million cars: By 2025, it took Tesla nearly two decades to deliver approximately 8 million cars in total. This plan requires selling an additional 12 million cars in the next decade.
Develop 10 million paid FSD users: This means that the FSD (Full Self - Driving) software must be extremely user - friendly and safe, making the vast majority of car owners feel that "the money is well - spent" and willing to pay for the subscription.
Deploy 1 million Robotaxis: This is basically a huge project from scratch. Transforming driverless taxis from sporadic tests into a commercial fleet of one million vehicles, with challenges in technology, regulations, and safety, is like climbing a mountain.
Deliver 1 million humanoid robots: Mass - producing one million Optimus robots like those in the movies and successfully launching them into the market within a decade is a huge challenge at every step.
In addition to the above four pillars, this plan also ties in a series of continuously growing EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) targets, starting from $50 billion and reaching an astonishing $400 billion. This ensures that while pursuing scale expansion, Tesla must maintain strong profitability and a healthy cash flow.
You might wonder where to start with so many ambitious goals.
The automotive business is Tesla's "foundation" and the starting point for all future stories. The hard target in Musk's compensation plan is to reach a total delivery volume of 20 million vehicles in the next 10 years. This means that on the existing basis, they need to work harder to increase the annual production from the current level of 2 million vehicles to three or four million vehicles per year.
Considering that there may be more affordable models in the future, let's assume that each car is sold for an average of $40,000. If the annual sales volume is 3.5 million vehicles, just from car sales, Tesla can generate $140 billion in annual revenue.
In the eyes of many, the automotive industry is a heavy - asset industry with a relatively low valuation. However, considering Tesla's brand, technology, and profitability, a P/S (Price - to - Sales ratio) of 5 - 7 times can be applied.
More importantly, every car Tesla sells is not just a car but a "mobile terminal" to the future. Therefore, overall, when Tesla reaches the milestone of 20 million vehicle deliveries, the automotive business can support a valuation of $1 to $1.5 trillion.
02 Where does the additional $7.5 trillion in valuation come from?
If Tesla's cars are the "body" that keeps running, then the FSD software is the "soul" injected into it.
Another milestone in this plan requires 10 million FSD subscription users. Let's do a simple calculation: Assume that the average monthly subscription fee globally is $100. When 10 million users subscribe, it means $1 billion per month and $12 billion per year!
The FSD subscription is essentially a SaaS (Software as a Service) business, with its core being high gross margins and high customer stickiness. The market is willing to pay extremely high valuation multiples for high - quality SaaS revenue, usually 20 - 40 times the P/S ratio or even higher. Considering the uniqueness of FSD and its core position in the trillion - dollar mobility market, it is reasonable to give it a very high valuation.
Just the $12 billion in annual revenue, if the market believes in its huge growth potential (such as licensing to other automakers), could be given a P/S ratio of over 100 times, directly contributing a market value of $1.2 trillion. If we consider future price increases or service tiering, the annual revenue of this business is expected to reach $20 billion. With a P/S ratio of 80 - 100 times, it can support a valuation of $1.6 to $2 trillion.
Once the FSD is smart enough, Tesla's ace - Robotaxi (driverless taxi) - will make its debut.
The goal for this part is to deploy 1 million Robotaxis, which will become a huge, driver - less money - making fleet. Today, your private car is idle 95% of the time. In the Robotaxi network, each Tesla can become a money - making tool that works 24/7 for you.
Assume that a Robotaxi operates 5,000 hours a year, generating a net income of $25 per hour for Tesla (after deducting electricity, maintenance, cleaning, etc.).
The annual income per vehicle is about $125,000, and for a fleet of one million vehicles, the annual income is $125 billion.
This is a brand - new, technology - driven high - profit service network. Its business model is similar to that of Uber or Didi, but without the driver cost, leaving a huge profit margin. The market will view it as a combination of technology and utilities, and it is entirely possible to give it a P/S ratio of 20 - 25 times. Therefore, just the Robotaxi network business alone can support a valuation of $2.5 to $3 trillion.
Once the automotive, energy, AI software, and mobility network are in place, Tesla will set its sights on a grander goal: the Optimus humanoid robot. The goal for this part is to have one million Optimus robots enter factories, warehouses, and even households.
The real value doesn't lie in the $20,000 - $30,000 hardware price of the robots. Its real power lies in its potential to disrupt the largest market - the labor market.
Model 1: Selling hardware. 1 million units * $25,000 per unit = $25 billion in annual revenue. This is just the beginning.
Model 2: Robot as a Service (RaaS). Hiring a worker for a factory position costs at least $50,000 per year in total costs. Now, if a factory rents an Optimus robot, it only needs to pay Tesla a $30,000 "service fee" per year, saving $20,000 per year. Annual revenue = 1 million units × $30,000 per unit = $30 billion
Optimus targets the global labor market worth trillions of dollars. Therefore, we can't value it with traditional perspectives. The capital market will define a new track for it, and it is reasonable to give it a P/S ratio of 50 times or even 100 times based on future pricing.
Even if we only calculate based on the $30 billion in annual service fees, with a P/S ratio of 80 times, its valuation is as high as $2.4 trillion. If the market believes that Tesla will dominate this trillion - dollar emerging industry, a valuation of $250 billion to $350 billion can be given.
In addition to the valuation, there is a very strict target in this compensation plan - an annual EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of up to $400 billion, which is the ultimate condition for unlocking a key compensation plan. Based on the above analysis, how far is it from this "ultimate goal"?
Musk's $1 trillion compensation plan isn't easy to obtain. In addition to driving the company's market value to an astronomical level, there is an extremely demanding ultimate condition: the company must earn $400 billion in "core profits" every year.
Based on the boldest predictions above, let's add up the profits of Tesla's future "money - making machines":
Automotive business ($140 billion in revenue, 20% profit margin) = $28 billion
FSD software ($12 billion in revenue, 90% profit margin) = $10.8 billion
Robotaxi network ($125 billion in revenue, 70% profit margin) = $87.5 billion
Optimus robot service ($30 billion in revenue, 80% profit margin) = $24 billion
Considering the often - overlooked energy and other businesses, let's optimistically assume $30 billion.
Now, let's sum it up: 28 + 10.8+87.5 + 24+30 = $180.3 billion. This figure is still $220 billion short of the ultimate goal of $400 billion, not even half!
So, how can this huge gap of $220 billion be filled?
First, there must be absolute economies of scale. The previously assumed 1 million Robotaxis and 1 million Optimus robots are far from enough. This number needs to be expanded to 2 million or even 3 million. Just 2.5 million Robotaxis alone can directly contribute over $200 billion in EBITDA, filling most of the gap single - handedly.
In addition to quantity, profits can also be increased in terms of "quality," that is, by increasing the profit margin. The pricing or subscription rate of FSD may be higher than we expected, and the service fee for Optimus may increase as its capabilities improve; the manufacturing cost of cars may be surprisingly low due to economies of scale.
Moreover, in the entire plan, the energy business is like a "hidden boss." Imagine that in the future, tens of millions of Tesla electric vehicles, countless households, and factories around the world use Tesla's energy - storage batteries. Connecting them through a network forms a global "virtual power plant." Selling electricity during peak hours and storing it during off - peak hours - just this "middleman" business has a profit potential in the tens of billions of dollars.
03 A "golden handcuff," a trillion - dollar gamble
After discussing that grand and somewhat science - fiction - like blueprint, let's zoom back and look at the human relationships and business games behind it. This sky - high compensation is far more than just money; it's more like an exciting card game on the table.
Musk's intentions are no longer a secret. He has publicly stated more than once that he hopes to have approximately 25% voting rights in Tesla. Otherwise, he'd rather go solo in the AI and robotics fields.
After Musk sold a large number of shares to buy Twitter (now X), his stake in Tesla decreased significantly. If this new compensation plan is fully implemented, it will bring his stake back to the range of 25% - 29%.
So, this is more like a strategy he set up to "rightfully" and firmly hold the steering wheel of Tesla's future. He wants to ensure that his AI visions, which many people consider risky and even crazy, won't be disrupted by short - sighted shareholders or "corporate raiders."
For Tesla's board of directors, this is a pair of "golden handcuffs" for Musk.
Musk is an energetic "Silicon Valley Iron Man" who simultaneously manages SpaceX, which builds rockets, Neuralink, which works on brain - computer interfaces, and also has influence in the social media and political circles.
The most headache - inducing problem for the board is probably: How can they make this "patriarch" focus his main energy on Tesla?
The answer is this ten - year plan that is deeply tied to the future blueprint he drew himself. This is undoubtedly the most magnificent pair of "golden handcuffs" tailored for him. Want the rewards? Then he must fulfill these promises in the next decade.
So, let's go back to our original question: How can Musk get this $1 trillion?
The answer is: By personally reshaping Tesla from a leading electric vehicle company into a super - tech platform integrating AI software, robotics, shared mobility, and energy.
Therefore, for the shareholders who will vote on November 6, the choice they face has become extremely clear and crucial. This vote is far from just deciding whether to give the boss an astronomical bonus. It's more like a referendum, allowing each investor to answer with real money:
Are you investing in a better automotive company or an artificial intelligence and robotics empire that may define the next era?
Regardless of the outcome, this compensation plan itself has painted a sufficiently shocking future picture. It tells the world in the most straightforward way that in Musk's dictionary, limits are meant to be broken.