Elon Musk's latest Tesla pay valued at $158bn - but he can't pocket it

Tesla has assigned a staggering value of $158 billion (£117 billion) to Elon Musk's 2025 compensation package, as indicated in regulatory filings submitted on Thursday. However, it is important to note that Musk will not be able to access these funds unless certain ambitious milestones are achieved.

The estimated compensation reflects what Musk would earn contingent upon meeting the terms of a highly ambitious pay agreement that was approved by Tesla shareholders in November. Notably, this package becomes payable only if Musk fulfills significant performance targets, such as elevating the company’s market value to $8.5 trillion. Achieving this milestone could potentially reward Musk with shares valued at up to $1 trillion.

Market analysts suggest that there is considerable work ahead for Musk before these objectives can be realized. Consequently, the impressive pay package remains largely theoretical at this time. Danni Hewson, head of financial analysis at AJ Bell, emphasized, "Elon Musk isn't actually going to pocket $158 billion. He still has a series of targets to meet, and none of the milestones outlined in the $1 trillion pay agreement approved by shareholders last year were reached in 2025."

Hewson further explained that Musk's reported compensation figures, detailed in a filing with the U.S. Securities and Exchange Commission (SEC), represent "a promise he'll receive that amount in Tesla shares for his work over the past year if he manages to deliver."

To justify this substantial pay-out, Musk must achieve a number of demanding operational milestones, including:

• Increasing Tesla delivery levels to 20 million vehicles and one million robots
• Securing 10 million subscriptions to Tesla's Full Self-Driving feature
• Launching one million self-driving Robotaxi vehicles into commercial operations
• Attaining up to $400 billion in core profit
• Ultimately raising Tesla's overall market value to $8.5 trillion

Should he successfully meet these goals, Musk would be granted more than 400 million additional Tesla shares, potentially worth around $1 trillion, if the company’s market valuation reaches those heights.

"The targets are suitably lofty, but investors wanted to reorient Musk’s focus on the electric vehicle manufacturer, and this unprecedented pay agreement has certainly attracted significant attention for both the company and its CEO," Hewson noted.

Biding his time

As of now, Musk holds the title of the world's richest individual. His net worth is currently estimated at $651 billion by Bloomberg and $788 billion by Forbes, positioning him well ahead of other significant figures in the technology sector, such as Google founders Larry Page and Sergey Brin.

Hewson highlighted that Musk's financial situation and the revenues from his various enterprises imply that, despite his lack of a salary from Tesla, "he can certainly bide his time."

Additionally, Musk's aerospace company SpaceX is on track to become one of the most valuable publicly traded firms globally. The rocket manufacturer has recently merged with Musk's AI startup and parent company of X, xAI, and is preparing for an initial public offering (IPO) that will enable its shares to be bought and sold on the stock market.

Moreover, Musk is involved in legal disputes regarding the direction of his former venture, OpenAI, which he co-founded with current CEO Sam Altman in 2015. In contentious exchanges with OpenAI's legal representatives, as well as the presiding judge, he has alleged that Altman and executive Greg Brockman "stole a charity" by pursuing profit-oriented initiatives that he believes contradict the organization’s founding mission.