A new pay package for Tesla Inc (NASDAQ:TSLA) CEO Elon Musk was approved by shareholders in November 2025. The pay package could be worth nearly $1 trillion if Musk and the company hit multiple financial and operational milestones.
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Here's a look back at Musk's 2018 pay package and how much investors could have made investing in Tesla stock at the same time Musk was given an incentive-based contract for future growth.
2018 and 2025 Pay Packages: A $55.8 billion compensation plan was announced by Tesla in 2018 that tied his potential earnings to items like the market capitalization, trailing 12-month revenue and adjusted EBITDA of Tesla.
“Tesla today announced a new 10-year CEO performance award for Elon Musk with vesting entirely contingent on achieving market cap and operational milestones that would make Tesla one of the most valuable companies in the world,” the company said at the time.
The company said for Musk to hit the full compensation plan, Tesla’s market capitalization would have to grow to $650 billion. Tesla modeled the 2018 compensation plan after a similar one that was awarded in 2012 that came before the company's market capitalization increased “17-fold” in five years.
As part of the compensation package, Musk would receive no salary, no cash bonuses and no equity, instead having compensation tied to the performance awards, which ensures that he will be compensated only if Tesla and all of its shareholders do extraordinarily well.”
The board granted the award to Musk on Jan. 21, 2018, and said it would be subject to shareholder approval at a special meeting in March 2018. Shareholders later approved the compensation plan.
Tesla went on to hit all the milestones in the compensation plan, unlocking billions of dollars worth of Tesla options for Musk.
In 2024, a Delaware judge voided the pay package after a lawsuit from a Tesla shareholder was brought to court. Tesla has appealed the case and the decision is still pending, a decision that could impact the wealth of Musk.
The 2025 pay package for Musk was approved at Tesla's 2025 shareholder meeting. The new pay package could award Musk with new shares up to an incremental 12% of the company's share count, potentially hitting a compensation of around $1 trillion in value.
Similar to the 2018 plan, the new 2025 pay package includes various milestones that must be met while Musk is at Tesla.
The milestones include Tesla hitting various market capitalization milestones from $2 trillion to $8.5 trillion. The milestones also include Tesla’s adjusted EBTIDA hitting an annual rate of $50 billion to $400 billion. Outside those metrics, the following are milestones that must be hit for the whole pay package to be achieved:
- 20 million electric vehicle deliveries
- 10 million active FSD subscriptions
- 1 million cumulative robots delivered
- 1 million robotaxis in commercial operation
Investing $1,000 in Tesla Stock: Regardless of what happens to Musk’s 2018 compensation plan and options that were unlocked, investors who bought shares of Tesla stock when the compensation plan was announced have been rewarded with the value he has brought to the company.
An investor could have purchased 42.57 Tesla shares with $1,000 on Jan. 23, 2018, when the compensation plan was announced, based on a split-adjusted price of $23.49.
The 42.57 shares would be worth $18,463.46 today, based on a share price of $433.72 at the time of writing. This represents a potential return of 1,746.3% over the last seven years and 10 months.
For comparison, the SPDR S&P 500 ETF Trust (NYSE:SPY), which tracks the S&P 500 broad market index, didn’t perform as strong. A $1,000 investment in the SPDR S&P 500 ETF Trust could have purchased 3.90 shares at the same time, based on an adjusted price of $256.20. Today, the investment would be worth $2,599.23. This represents a return of 159.9% over the last seven years and 10 months.
The investment in Tesla did more than 10 times better than the S&P 500 over the same time period, highlighting the value that Musk brought to Tesla and the reward for the shareholders who backed his 2018 pay package.
The future will determine if the 2025 pay package has a similar result for Tesla shareholders.
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This article was previously published by Benzinga and has been updated.
