Analysts Sound Alarm: Legal Loopholes Threaten Musk’s $1 Trillion Tesla Bonus Package

Wall Street analysts are raising red flags over what they call 'regulatory blind spots' in Elon Musk's unprecedented compensation deal.

The $1 Trillion Question

Legal experts point to governance gaps that could let Tesla's board bypass traditional shareholder oversight mechanisms. One corporate law specialist called it 'compensation engineering at its most aggressive.'

Regulatory Gray Areas

The package's structure allegedly contains provisions that sidestep standard disclosure requirements. Several institutional investors are now questioning whether existing securities laws can properly address such massive, performance-based awards.

Market Implications

If unchallenged, this could set a precedent for other tech giants to structure similarly ambitious compensation packages—because when you're playing with trillion-dollar numbers, who's counting the zeros anyway?

The situation highlights how traditional corporate governance frameworks struggle to keep pace with Silicon Valley's scale of ambition. As one analyst dryly noted: 'When the bonus could buy several small countries, maybe it's time to check the fine print.'

Vehicle sales target set below 2024 performance

Four automotive analysts said the vehicle sales targets are surprisingly easy to hit. If Musk sells an average of 1.2 million cars per year through 2035, he gets $8.2 billion in stock once Tesla’s market value goes from $1.4 trillion to $2 trillion. That growth is actually below typical long-term market performance, and it’s 500,000 cars per year less than what Tesla sold in 2024.

Just this Tuesday, the company started offering cheaper versions of the Model Y SUV and Model 3 sedan because sales have been dropping.

Six robotics and self-driving commentators pointed out three product development targets that use pretty vague language. The wording might let Musk claim big payouts without actually boosting profits much.

A Tesla board rep said the compensation only has value if two things happen. First, the company’s valuation needs to nearly double, and second, Musk has to hit a designated operational target.

The deal requires Musk to stick around as a Tesla executive for at least 7.5 years to get the stock. But here’s an interesting twist. He’d get voting power from those shares right away, as soon as he earns them.

Full self-driving subscriptions could be met easily

Each target gives Musk 1% of Tesla stock when paired with valuation milestones between $2 trillion and $8.5 trillion.

For instance, he needs 10 million subscriptions to Tesla’s “Full Self-Driving” software, which, by the way, still needs a human watching it. The requirement only asks for an “advanced driving system” without any mention of actual autonomous capability.

William Widen, who teaches at the University of Miami and focuses on autonomous driving, called this a “made-up term” with no standard industry definition. Analysts think Tesla could hit that subscription number just by dropping the current $8,000 upfront cost or $99 monthly fee. China’s BYD, Tesla’s biggest competitor, already gives a similar system away for free.

Another target calls for one million robotaxis “without a human driver in the vehicle.” Four commentators said this wording could allow for humans controlling the cars remotely or even sitting in the passenger seat, which Tesla already does in Austin, Texas.

Then there’s the robot target. One million robots produced. It seems to mean the Optimus humanoid robots, but the actual contract doesn’t say “humanoid.” Instead, it broadly defines a “bot” as any mobile physical product powered by AI.

As reported by Cryptopolitan earlier, a group of major Tesla investors has already voiced opposition to the package, arguing the performance criteria are vague and the board isn’t independent enough from Musk.

Hit any two product goals within ten years, plus reach a $2.5 trillion valuation? That pays Musk $26.4 billion. Three targets and a $3 trillion valuation? $54.6 billion.

Gene Munster, managing partner at Deepwater Asset Management (which invests in Tesla), acknowledged the loose wording but thinks investors will ultimately demand real transformational products. “If people start smelling there’s something goofy here, he’s in trouble,” Munster said.

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