(MENAFN- AsiaNet News)

• Tesla investors decide Thursday on Elon Musk's 12-tranche pay plan tied to market-cap and performance milestones.
• Backers say it secures Musk's focus, while proxy advisers call it“astronomical” and hard to achieve.
• The outcome could shape Tesla's valuation and Musk's future control of the company.

Retail investors signaled caution in Tesla, with the EV maker's shares falling 0.2% in Thursday's premarket session, ahead of a closely watched shareholder vote on what could become the largest executive compensation package in corporate history.

The proposal, which could result in CEO Elon Musk holding $1 trillion worth of shares in a decade if he meets all targets, will test faith in his ambition to expand Tesla from an electric-vehicle maker into an artificial intelligence and robotics powerhouse.

What's Inside The Pay Package?

The 2025 Tesla CEO Performance Award consists of 12 tranches of performance-based restricted stock totaling about 423.7 million shares, or roughly 12% of Tesla's equity if fully earned. Musk receives no salary, no cash bonus, and no guaranteed equity.

Each tranche provides voting rights once Tesla achieves both a market capitalization and an operational milestone. However, the economic value cannot be realized for at least seven-and-a-half years, and in some cases up to 10 years, as long as Musk remains in service. 

Musk has said he aims to secure around 25% voting control, which he considers sufficient to influence Tesla's direction on artificial intelligence and robotics while still allowing shareholder oversight. Musk currently owns about 15.8% of Tesla's outstanding shares, according to Morningstar.

The Market-Capitalization Ladder

Tesla's new plan ties stock awards to a series of market-capitalization targets starting at $2 trillion and rising in $500 billion increments to $6.5 trillion, followed by two final jumps of $1 trillion each. The last milestone, $8.5 trillion, would make Tesla the most valuable company in history, worth well above Nvidia's current market value of about $5 trillion.

Operational Targets

Tesla has paired each market milestone with operational goals, including 20 million vehicles delivered cumulatively, 10 million Full Self-Driving (FSD) subscriptions, 1 million Optimus humanoid robots, 1 million robotaxis, and adjusted EBITDA milestones ranging from $50 billion to $400 billion. The highest EBITDA target must be achieved across three separate four-quarter periods.

These targets are meant to link Musk's compensation directly to scale, innovation, and profitability rather than short-term share performance.

The Best-Case Scenario

If shareholders approve the package, it would signal confidence in Musk's leadership and his vision to expand Tesla into artificial intelligence, energy storage, and humanoid robotics. Board Chair Robyn Denholm has called this period an“AI inflection point” for the company.

If all milestones are achieved, Tesla's market value could rise from about $1.45 trillion to $8.5 trillion. Such an outcome would depend on widespread adoption of FSD, the development of robotaxi networks, and the commercial deployment of Optimus robots.

For retail investors, a $10,000 investment in Tesla today could theoretically grow to $80,000–$90,000 if the company meets all its targets over the next decade, before accounting for about 12% dilution from new shares. Since it went public in June 2010, TSLA has delivered returns of over 36,000%.

The Worst-Case Scenario

A rejection of the plan could cast uncertainty over Tesla's future leadership. Chair Robyn Denholm has previously cautioned that Musk might step back from his executive role if the package is voted down, and the company warned in September that he had“raised the possibility that he may pursue other interests” if it were denied. In addition to leading Tesla, Musk is also the CEO of the aerospace company SpaceX, the artificial intelligence startup xAI, and brain-computer interface developer Neuralink.

Analysts also note that Tesla trades at valuation multiples far above those of traditional automakers and even some major technology firms. Without Musk, the stock could lose its premium and trade closer to auto-industry levels, according to a Reuters report.

For retail investors, the same $10,000 position could shrink to roughly $300–$500 if Tesla's lofty valuation compresses toward traditional automaker levels, with the stock's forward price-to-earnings ratio falling from an eye-watering 222x to the 6x–11x range typical of General Motors and Ford.

The Middle Ground

If the plan passes but Tesla achieves only some of the early milestones, Musk could still unlock initial tranches that begin around $2 trillion in market capitalization and corresponding operational goals. That would mark substantial value creation, though it would still fall short of the plan's $8.5 trillion ceiling.

While only a simple majority is needed for approval, a close outcome could still fuel governance debates or renewed legal scrutiny, given the court challenges that voided Musk's earlier 2018 award.

What Investors Are Weighing

The Bull Case

Supporters such as Ron Baron and Cathie Wood argue that Musk's leadership and ambition remain unique and that tying his pay to bold milestones helps align investor interests with long-term growth. Baron called Musk the“ultimate key man,” while Wood said she expects the new package to pass“decisively.”

The Bear Case

Proxy advisers ISS and Glass Lewis have urged shareholders to vote against Musk's proposed pay package, calling it“astronomical” in size and warning that its design could produce very high payouts even if only partial goals are met. Glass Lewis said the potential dilution and payment structure“warrant significant concern,” adding that the plan depends on highly ambitious performance milestones that may be difficult to achieve. 

Stocktwits Traders Brace For Tesla Volatility 

On Stocktwits, retail sentiment for Tesla was 'bearish' amid 'normal' message volume.

TSLA sentiment and message volume as of November 6 | Source: Stocktwits

One user noted that Tesla's shareholder meeting could become a“sell the news” event or possibly push shares to new highs, adding that retail greed appeared concentrated in call options. 

The user also remarked that Optimus remained in a demo stage, FSD was still at Level 2 autonomy, making the“cybercab” vision impractical, and the long-delayed Roadster might be mentioned again alongside“rumors about flying cars.”

Another user predicted the pay package vote would likely pass, with Tesla's stock rallying toward $488 before a pullback to around $469 by Friday, describing the setup as“higher lows, no ceilings.”

Tesla's stock has risen 14% so far in 2025.

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