As large companies announce hundreds of thousands of job cuts, US employers have disclosed more than a million layoffs in 2025 through October, the highest year-to-date level since 2020. The technology sector alone has shed well over 100,000 workers this year. Against that backdrop, Tesla shareholders have just approved a pay plan under which Elon Musk could, in theory, receive stock awards worth around $878 billion (not quite a trillion) over the next decade. This contrast is driving renewed debate about executive pay, inequality and corporate governance. Musk’s $1T pay plan
Before we jump to conclusions, however, let us gather the facts. The November 2025 plan carries a Zero salary which is entirely equity-based, and is only payable over the next 10 years.
In other words, Musk would not receive $1 trillion in cash; he would receive stock options whose value depends on Tesla’s market value at the time they vest.
This new plan follows an earlier 2018 Tesla package that granted Musk options equal to roughly 12% of Tesla’s then-outstanding shares, vesting in 12 tranches as market-cap and revenue milestones were met. By 2022 those options were worth about $56 billion, and later over $100 billion as Tesla’s stock rose.
According to the shareholder-approved plan described in regulatory filings and media reports, Elon Musk’s performance targets over roughly the next decade include delivering about 20 million vehicles per year – several times Tesla’s current output – deploying roughly 1 million “Robotaxis” in commercial service, implying successful and widely scaled autonomous-driving technology, selling about 1 million humanoid “Optimus” robots as commercial products, achieving up to $400 billion in annual core profit, and ultimately lifting Tesla’s total equity value into the multi-trillion-dollar range, with a potential market capitalisation of about $8.5 trillion if all milestones are reached.
So will Musk make $900 billion in 2025? Doubtful. The targets appear unrealistic.
But this is where the fine-print comes in: even if Musk fails on most of his Mars-shot milestones, he could make $25 – $50 billion! And therein lies the problem: even if he sells fewer cars in 2035 than he did in 2024, he would earn $8 billion in stock. If the CEO of GM or Ford sold fewer cars today than they did ten years ago, they would be fired.
It would appear, then, that Tesla shareholders robbed themselves by giving away the store to Musk. Musk’s $1T pay plan
Prosperity at the top, precarity below
At the same time, the broader labour market is experiencing visible stress. Through October 2025, US companies announced about 1.1 million job cuts, a 65% increase over the same period a year earlier and the highest total since 2020. In US tech alone, at least 95,000 workers were laid off in 2024 and over 118,000 more so far in 2025. Many of these cuts occurred even as firms remained profitable and invested heavily in AI and automation.
These job losses intersect with a long-running trend of rising CEO-to-worker pay ratios. Analyses by the Economic Policy Institute and AFL-CIO estimate that, for large US companies, the average CEO in 2024 earned roughly 280–285 times the median worker’s pay. Among the 100 largest low-wage US employers, the average ratio reached about 632:1 in 2024. Musk’s potential $1 trillion package is unfair not because of how it rewards success, but how it encourages failure in its top executive. Musk’s $1T pay plan
Indeed, a Delaware Chancery Court found that an earlier 2018 package for Musk was not the product of an independent board process and was unfair to shareholders – those very same shareholders who approved his $1 trillion package by a vote of 75-25.
A paycheque out of step with reality
Are sky-high CEO salaries “reasonable”? Absolutely not. It is just financial legerdemain where the CEO gets paid billions even if he fails, while thousands of workers get laid off even if they work hard and do everything that is expected of them.
Yes the headline $1 trillion figure is contingent, not guaranteed cash; it assumes Tesla meets extremely ambitious operational and valuation milestones and its share price rises dramatically. Musk’s $1T pay plan
However, the plan follows a prior multi-billion-dollar award that courts have already found procedurally flawed and unfair, despite shareholder votes in favour.
The new award is being implemented in an environment of historically high layoff announcements and record CEO-to-worker pay gaps, which is why it is central to current debates about inequality and corporate governance.
How can this be fixed? Simple: give Musk a base salary and annual targets. If he succeeds each year, by all means give him $80 billion each year, leading to the same pay-out after ten years. But if he fails, let him be fired, not get paid fewer billions, but billions anyway. Musk’s $1T pay plan
Now that is fair.
READ MORE: Narrow rally, broad risks: Investing in an era of concentrated markets and modest growth
