Tesla plans to pay Musk $1tn

“It’s a $1.4 trillion company, not based on the current car business. It’s a $1.4 trillion business based on expectations of what it can deliver over the next three years.”

And a lot of those expectations are fixed on Musk and his record of thinking big and thinking long term, he says.

The potential reward for Musk is as astronomical as his vision for space travel.

With $1 trillion you could buy 20 million Model Y Teslas, at around $50,000 each. Or you could buy yourself a $10m house every day for 250 years, and still have change for furnishing and decorating.

The conditions appear to be very testing, including delivering 20 million Tesla vehicles and one million robots. A million self-driving Robotaxi vehicles will also need to be on the roads.

Tesla’s overall market value will need to rise from its current $1.4tn to $8.5tn.

These are “incredibly high milestones”, says Ann Lipton, a law professor at the University of Colorado.

However, the board does have “discretion” to decide when some of them have been met, she adds.

“If intervening events prevent him from reaching the goals, the board can deem them met anyway.”

So the targets may not turn out to be quite as demanding as they appear.

There is also nothing in the terms, no constraint, that prevents Musk continuing to speak out about politics or anything else.

“Even after the pay package was proposed, he didn’t pull back from his political commentary,” adds Prof Lipton.

“So it seems to me that this pay package, whatever the goals are, however lofty they may be, they’re not going to inhibit him from involving himself in whatever matters he wants to be involved in.”

That freedom could pose the biggest risk, according to Stephanie Valdez Streaty, director of industry insights at car sector marketing and software firm Cox Automotive.

Musk is a visionary she says, but he’s also unpredictable, and it is possible that his other interests may distract him as they have before, leading him to neglect Tesla, which itself is already a smorgasbord of different businesses and challenges.

“I’m hoping that based on his experience with getting politically involved and how that really hurt some of his brand and sales that he has learned to really focus on this business.

“But that’s going to be the board’s responsibility,” she adds, “to make sure that he stays within the guardrails, and that he does what’s right for Tesla.”

And if he does, well the sky is the limit, or possibly Mars, for Musk’s ambition.

“People laughed when his 2018 pay package was approved,” says Prof Lipton. “And he hit those milestones well ahead of schedule.”