Elon Musk’s path to ‘trillionaire’ status isn’t guaranteed — The devil is in the details

Tesla chief Elon Musk is on a roll after some 75% of the electric vehicle (EV) maker’s shareholders signed a historic $1 trillion pay package, which exceeds the GDP of some countries.

So, does this mean that Elon Musk is now officially the first trillionaire in world history? No, not yet.

While the salary package is approved, payments will be subject to a series of challenging performance milestones that the tech mogul will achieve over a 10-year period. If these are not met, the board can halt mass distributions.

What goals will Elon Musk need to meet to receive a $1 trillion salary from Tesla?

According to the AP report, Elon Musk was given the “largest CEO pay package in corporate history”, including approximately 25% of the company’s total shares, and noted that his performance targets were “ambitious”. In particular, he is already Tesla’s largest shareholder.

What does Elon Musk need to achieve? According to a report by the Washington Post, Tesla’s entire salary will be given in 12 tranches as the businessman reaches each milestone. But critics have noted that when it comes down to it, the board has discretion over the specific terms of stock awards, which could make the targets “suggestions rather than prescriptions.”

How much will Elon Musk get if Tesla fails to meet its targets?

According to the WaPo report, shareholders’ approval of the pay package is a “vote of confidence” for Elon Musk, who has a history of over-promising products such as Optimus robots.

Even if he fails, Elon Musk will fail on the rise. The world’s richest man will earn at least $50 billion from additional Tesla shares in exchange for the automaker increasing its market value by 80% (which it achieved in the last fiscal year), doubling vehicle sales and tripling operational earnings, the AP report said.

According to CNBC, Elon Musk currently does not receive a salary and his entire compensation consists of Tesla shares. So even if the massive trillion-dollar payout doesn’t materialize, Elon Musk could still become the world’s first trillionaire if he manages to push the automaker’s shares closer to its $8.5 trillion market cap.