Tesla's stock price rises to an 8-month high as the board supports Musk

According to the Zhitong Finance APP, Tesla (TSLA.US) CEO Elon Musk's proposed trillion-dollar compensation plan has not been deemed "excessive" or "risky" by the Tesla board, but rather received unanimous support—the board believes that only Musk can lead the company through the next phase of disruptive transformation, making this "astronomical salary" completely reasonable and deserved.

Tesla board chair Robyn Denholm stated that this generous compensation plan "reserves" the different roles Musk may play in the company, while Musk's political activities are "up to him." She emphasized, "From a political perspective, his actions and motivations depend on personal choice... We are in a democratic country, and everyone has the freedom to express their views."

This statement recalls the strong backlash faced by Tesla during Musk's leadership of DOGE, where the company encountered significant resistance from dealers, car owners, and Musk himself, leading to a nearly 50% drop in stock price at one point.

However, Denholm denied that political positions would have a long-term negative impact on Tesla's stock price, firmly believing that "people will buy what they truly like, and Tesla cars are such products."

Despite Musk potentially expressing political views publicly, the Tesla board still approved an unprecedented compensation plan to entice him to stay—if Musk can lead Tesla to achieve a series of ambitious goals and maintain focus on company affairs, shareholders will vote in November 2025 on whether to grant him an additional 423 million shares of Tesla stock, approximately 12% of the current total equity, which would increase Musk's voting power from the current 13% to about 25%.

To achieve this massive reward, Musk must meet multiple operational targets: Tesla's market value must reach and maintain $2 trillion (currently valued at $1.3 trillion, needing an additional $700 billion), and for every additional $500 billion in market value, another bonus can be unlocked, until the market value reaches $8.5 trillion, fulfilling all 12 bonuses.

Additionally, the company must deliver 20 million vehicles, achieve 20 million active full self-driving subscription users, deliver 1 million Optimus robots, deploy 1 million autonomous robotaxi vehicles for commercial use, while also meeting EBITDA targets, and Musk must remain in his position or be fully committed in another form for the next 7.5 to 10 years.

During the compensation negotiations, Musk promised the board to gradually reduce his political activities and discussed succession plans. Denholm stated, "Tesla is prepared for leadership succession," and Musk has been in succession discussions with the board. These statements have boosted investor confidence, driving Tesla's stock price to an 8-month high of $396.69, with a closing increase of 7.36% on Friday