Tesla’s board of directors proposed a new compensation package for CEO Elon Musk, featuring 12 operational and market capitalization milestones. This plan could see Musk owning 25% of Tesla if all 12 tranches are achieved. The package aims to retain Musk for at least 7.5 to 10 years, reducing near-term stock risks.

The operational milestones include achieving adjusted EBITDA, delivering 20 million Tesla vehicles, obtaining 10 million active FSD subscriptions, and deploying 1 million robotaxis and Optimus robots. This aligns with Tesla’s long-term autonomous driving and humanoid robot goals. Musk’s ownership stake could rise to 25% if all milestones are met.

Despite the new pay package potentially retaining Musk and reducing stock risks, Tesla shares are viewed as overvalued, trading roughly 40% above the $250 fair value estimate. The stock is currently in 2-star territory, and the robotaxi rollout may take longer than management’s guidance, with a full service expected by 2028.

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Read more at Morningstar: Shares Rise on Board Proposal for New Compensation Plan for CEO Elon Musk