The share price of electric vehicle manufacturer Tesla (NASDAQ: TSLA) is rising after the company announced a new pay package for CEO Elon Musk.

By press time, TSLA stock was trading at $354, up about 4.5% for the day.

Investors appear to be reacting to the proposed compensation plan for Musk, potentially valued at about $1 trillion, in what would be the largest executive pay package in corporate history.

The proposal, disclosed in Tesla’s proxy filing, is structured to keep Musk at the helm for the next decade. 

It outlined a series of ambitious performance targets that Musk must meet to unlock the full payout. Chief among these is the expansion of Tesla’s robotaxi business, alongside a dramatic increase in the company’s market value. 

Under the plan, Tesla’s market capitalization would need to rise from approximately $1 trillion today to at least $8.5 trillion over the next decade.

Musk’s Tesla stock ownership 

If fully realized, the package would significantly boost Musk’s ownership in Tesla. The additional shares could raise his stake to at least 25%, a level Musk has publicly stated he wants to secure. 

By tying the payout to performance metrics, the company aims to align Musk’s compensation with aggressive growth targets that could reshape Tesla’s future.

While the sheer size of the proposed package is unprecedented, it also points to the high expectations being placed on Tesla’s next phase of growth. 

The package also appears to strengthen Musk’s position at the company after some shareholders called for his ouster, citing his political involvement. 

Notably, Musk has faced mounting challenges in recent years as Tesla contends with slowing sales and increasing competition from Chinese manufacturers.

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