On a crisp November evening in Austin, Texas, Elon Musk took the stage at Tesla’s shareholders’ meeting and a tangible moment of celebration after shareholders approved his monumental $1 trillion compensation package.
But that dance, joyful as it was, represents just the beginning of an extraordinary decade-long performance odyssey. To actually collect on this historic paycheck, Musk must achieve what Tesla’s board calls “Mars-shot milestones”, a suite of operational and financial targets.
tied to quarterly earnings or annual metrics, Musk’s $1 trillion package is structured as 12 equally-sized tranches of stock grants, each unlocked only when Tesla simultaneously achieves both a market capitalisation milestone and a corresponding operational target.
The compensation begins vesting when Tesla’s market capitalisation reaches $2 trillion—a target the company must hit while simultaneously delivering on an operational goal.
From there, the market cap milestones escalate in carefully orchestrated increments: nine successive $500 billion increases, followed by two final $1 trillion jumps, culminating at $8.5 trillion.
This math means Tesla’s valuation must more than quadruple from its November 2025 level of approximately $1.5 trillion. For perspective, Nvidia, the world’s most valuable company as of mid-2025, hit $5 trillion cap recently, becoming the 1st to achieve it. Musk’s final target would make Tesla worth nearly more than double Nvidia’s current valuation.
“Standard compensation packages typically awarded to executives at other firms were deemed unsuitable for structuring Mr. Musk’s incentive compensation,” Tesla noted in its regulatory filing, according to Reuters reporting. This is, in short, not a typical CEO pay structure.
While market capitalisation provides the scaffolding, four monumental operational achievements form the true pillars supporting each tranche unlock:
THE 20 MILLION VEHICLE DELIVERY TARGET
By the end of the 10-year period, Tesla must cumulatively deliver 20 million vehicles. This is, without question, the most ambitious production goal in the company’s history. T
esla reached its 8 millionth vehicle milestone in June 2025 after 17 years of production. The arithmetic is staggering: Musk must oversee the production of an additional 12 million vehicles, 150% more than Tesla has ever built, in just a decade.
In practical terms, this requires Tesla to maintain annual production of approximately 2 million vehicles, a substantial increase from recent levels.
THE ROBOTAXI REVOLUTION: 1 MILLION COMMERCIAL VEHICLES
Equally ambitious is the requirement that Tesla must have 1 million robotaxis in commercial operation over three consecutive months by the end of the period.
This transforms Tesla from an automaker into an autonomous transportation network operator. Currently, Tesla’s robotaxi fleet in Austin, the company’s test market, numbers in the hundreds, with projections suggesting 300-400 vehicles by mid-2026.
The jump from hundreds of vehicles in testing to 1 million in commercial operation represents not merely a scaling challenge but a regulatory, infrastructure, and technological transformation. The company must obtain approvals from the National Highway Traffic Safety Administration (NHTSA) and operate across multiple cities and states. Musk has indicated expansion to 8-10 new markets by year-end 2025, including Florida, Arizona, and Nevada.
THE OPTIMUS HUMANOID ROBOT: 1 MILLION UNITS DELIVERED
Tesla must deliver 1 million humanoid robots, branded as Optimus, starting from the grant date of September 3, 2025. This operational milestone ventures into territory that no automaker has attempted.
At the November shareholders’ meeting, Musk announced that Tesla aims to produce about 1 million Optimus units annually with a target cost of $20,000 per unit. Currently, humanoid robots are prototype-stage technology. The leap from prototype to 1 million annual units is staggering.
THE FULL SELF-DRIVING SUBSCRIPTION MILESTONE
Tesla must achieve an average of 10 million Full Self-Driving (FSD) subscriptions over three consecutive months during the 10-year period.
As of early 2025, FSD had approximately 12% market penetration across Tesla’s fleet, with 6 billion miles of autonomous driving logged. The path from 12% adoption to capturing subscriptions from 10 million Tesla owners (which would represent roughly 50-60% of Tesla’s installed base depending on fleet growth) requires dramatic improvements in FSD reliability, comfort, and consumer confidence.
Underpinning all operational milestones sits a financial requirement: achieving adjusted EBITDA of up to $400 billion over four consecutive quarters by the final tranches. To contextualise this figure, Tesla’s adjusted EBITDA in 2024 was approximately $16 billion. The $400 billion target represents a 25-fold increase in profitability. This is not simply about selling more vehicles or services—it reflects an entirely different margin profile, suggesting that Tesla’s business mix must shift dramatically toward high-margin products like robotaxis and AI services rather than traditional vehicle sales.
There is an additional, often-overlooked requirement: the final two tranches of stock awards require Tesla’s board to endorse a succession plan for the CEO position. This stipulation exists to ensure that Musk cannot simply hold shares hostage indefinitely if he steps down. The board must have an approved plan for continuity, yet the public record remains unclear about what such a succession plan entails.
Musk must either remain as CEO or hold another approved executive position at Tesla at the time each tranche vests. If he leaves the company before the 10-year vesting period ends, he forfeits all unvested shares except in specific circumstances such as qualifying terminations or a change of control. This effectively locks Musk into Tesla through 2035, ensuring that—assuming all targets are met—he remains committed to the company’s strategy for a full decade.
Critically, this is not an all-or-nothing compensation structure. Each of the 12 tranches represents 1% of the total stock grant. If Tesla hits some milestones but misses others, Musk receives proportional compensation.
For example, if Tesla reaches only the $3.5 trillion market cap target while delivering 15 million vehicles (rather than 20 million) and achieving 500,000 robotaxis (rather than 1 million), Musk could still receive partial vesting of multiple tranches, potentially worth tens of billions of dollars.
The humanoid robot dance at the November shareholders’ meeting was a premature celebration, it seems, as the real test begins now.