11:54 AM EDT, 09/05/2025 (MT Newswires) -- Tesla's (TSLA) board proposed a new compensation package potentially worth around $1 trillion for Chief Executive Elon Musk that would boost his voting power in the electric vehicle maker, a provision Wedbush Securities said is "critical" to retain him.

The new pay plan is being billed as the largest corporate compensation package in history.

The package includes a potential award of about 423.7 million shares to Musk in the company, to be granted in 12 tranches, representing about 12% of its adjusted share count. The move would boost Musk's voting power in Tesla to about 25%.

"Tesla does not currently have a long-term CEO performance award in place to retain and incentivize Elon to focus his energies on Tesla and lead us through this pivotal moment in our history," Robyn Denholm and Kathleen Wilson-Thompson, members of the board's special committee, said in a shareholder letter contained in a proxy filing. "It's time to change that."

Wedbush analysts led by Daniel Ives described the proposal as a "smart move."

"This represents a critical next step to keep Musk as CEO at least until 2030 with Tesla heading into one of the most important stages of its growth cycle with the autonomous and robotics future now on the doorstep," Ives wrote in a note.

To receive the full package, Musk will have to meet several targets, including driving Tesla's market capitalization to at least $8.5 trillion by 2035, according to the proxy filing. The company currently has a market cap of more than $1 trillion. Tesla will also be required to generate at least $400 billion of adjusted earnings before interest, taxes, depreciation and amortization for three separate periods of four-consecutive quarters.

The operational milestones include 20 million vehicles delivered and 1 million robotaxis in commercial operations. The package is subject to shareholder approval at a meeting on Nov. 6.

The brokerage maintained its outperform rating on Tesla's stock and reiterated its 12-month price target of $500. The EV maker's shares rose 3.1% in Friday trade.

Last month, Tesla awarded Musk 96 million restricted shares of its stock, worth about $29 billion at the time, as part of efforts to keep him focused on the company. The compensation package will vest after two years if Musk stays as CEO or in an executive position responsible for product development or operations.

Price: 345.81, Change: +7.28, Percent Change: +2.15