Tesla shareholders approve Musk's sky-high compensation, spotlighting the governance model of the strongman era

Author: Niusike, Deep Tide TechFlow

Original Title: Musk Bets Trillions, The World Enters the Era of Strongmen

In the early morning of November 7, Tesla shareholders cast an unprecedented vote, with more than 75% approving Elon Musk's compensation plan totaling as much as 1 trillion dollars.

After the voting results were announced, the scene erupted in enthusiastic cheers, with Tesla shareholders loudly chanting Musk's name.

If this compensation agreement is fully realized, Musk will leap from being the world's richest person to becoming the world's first "trillionaire."

Marching Toward an 8.5 Trillion Dollar Market Cap

How can Musk receive a trillion-dollar compensation?

According to public documents, Musk's incentive plan will be divided into 12 phases, each with clear market cap and operational targets.

The market cap targets start at 2 trillion dollars and ultimately reach 8.5 trillion dollars. For each phase completed, Musk will receive about 35.31 million shares. After all phases are completed, his shareholding ratio may increase from the current approximately 15% to 25%.

Of course, the market cap requirement is not just about briefly reaching the target; the corresponding market cap must be maintained for at least 6 months to unlock the reward.

In addition to the market cap requirements, each phase also has corresponding business targets.

For example, the first phase requires the completion of one of the following 12 operational milestones, while the third phase requires the completion of any three of these 12 operational milestones.

The twelve operational milestones:

1. Adjusted EBITDA: 50 billion dollars

2. Adjusted EBITDA: 80 billion dollars

3. Adjusted EBITDA: 130 billion dollars

4. Adjusted EBITDA: 210 billion dollars

5. Adjusted EBITDA: 300 billion dollars

6. Adjusted EBITDA: 400 billion dollars

7. Adjusted EBITDA: 400 billion dollars

8. Adjusted EBITDA: 400 billion dollars

9. Cumulative vehicle deliveries: 20 million units

10. FSD users: 10 million

11. Robotaxi: 1 million taxis

12. Humanoid robots: Cumulative delivery of 1 million robots

These targets must be completed within ten years, and some require continuous maintenance for a certain period to take effect.

According to these requirements, if Tesla achieves an adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of 130 billion dollars in a single year in the next few years, and the market cap reaches 3 trillion dollars, then the rewards for phases one to three can be unlocked, granting a total of 105 million dollars worth of stock. This is because an EBITDA of 130 billion dollars means the company has reached three operational milestones (adjusted EBITDA of 50, 80, and 130 billion dollars).

Is it achievable?

In the nine months ending September 2025, Tesla's net profit was 2.9 billion dollars, and adjusted EBITDA was 10.8 billion dollars. The adjusted EBITDA for 2025 is expected to be 14.4 billion dollars.

At this level, Tesla would need to grow at a compound annual rate of 51% to reach 400 billion dollars by 2033 and maintain it for another 2 years.

This means sales would need to jump from 93 billion dollars to 2.5 trillion dollars, which is almost insane from a cash flow perspective and is essentially an impossible task.

But Tesla's valuation has never been the result of a cash flow model; it is the product of "narrative leverage." As long as the story is strong enough, the market will naturally provide a premium.

Narratives drive price increases, and prices in turn validate the correctness of the narrative.

The market's high valuation expectations and confidence in Tesla have always been built on "optionality"—any one of its side businesses (AI, robotics, energy) could become a new growth engine.

Therefore, the true significance of this incentive plan may not lie in the bonus amount, but in the fact that it binds Musk's strategic direction for the next decade:

Tesla must achieve comprehensive breakthroughs in AI, energy, autonomous driving, and manufacturing to realize this "visionary economic experiment."

From this perspective, Tesla's market cap target is actually the easiest part of the plan to achieve.

The Era of Strongmen

In this vote, what Musk gained was far more than just financial incentives.

If the plan is fully realized, his shareholding ratio will increase from 15% to about 25%, meaning a further concentration of governance rights.

The capital market's trust in Musk is almost religious.

More than 75% of shareholders chose to support this plan, even though it would dilute their own equity and weaken the board's checks and balances, they are still willing to let Musk continue to lead Tesla's destiny.

As a result, Tesla has moved beyond the traditional sense of a public company and has become a "narrative platform" centered on its founder. Its valuation, strategy, brand, and technological pace are all tied to the will of one person.

Similar phenomena are playing out in different industries, as the world enters the era of strongmen.

In the AI field, the equity and voting mechanisms of companies like OpenAI and Anthropic are also strengthening the long-term dominance of core founders;

In the cryptocurrency world, many protocols are also maintained around the "core founder + token narrative."

Founders provide the story and direction, capital provides resources and time, and governance rights are consciously ceded in exchange for the continuation and expansion of the narrative.

The essence of the strongman era is a kind of collective voluntary ceding of power.

Investors, employees, regulators, and even society as a whole are, in the name of "growth" and "innovation," returning more power to a few individuals.

Worth Learning for Web3

Tesla's equity incentives can also be regarded as a kind of Tokenomics experiment.

In the crypto world, many projects release a large number of tokens to the team and founders all at once after the token generation event (TGE).

Narrative comes first, delivery lags behind—this has become a common structural flaw. Project teams often cash out early after telling a grand enough story, while execution, product, and profits are postponed.

This "deliver first, build later" model can attract speculative capital in the short term, but it is difficult to support long-term innovation and trust.

In contrast, Tesla's compensation plan is more like a structured long-term incentive model.

Equity incentives are not granted at the beginning, but can only be unlocked after the market cap reaches a specific range and is maintained for a period of time; in addition, rewards must be tied to specific outcomes, including revenue, profits, user or product adoption, and other quantifiable indicators; and ultimately, shareholders decide whether to approve.

If founders and teams want to receive high returns, they must continuously drive growth in market cap, cash flow, and products.

If the crypto industry could introduce a similar structure, allowing token incentives to be released in sync with market cap performance and product outcomes, it might be possible to filter out projects that can truly create cash flow and utility value.

Let Web3 truly move from "storytelling" to "product delivery."

But if that's the case, one wonders, how many people would still choose to start a business in Web3?