Tesla shareholders just voted to approve Elon Musk's compensation package. One trillion dollars. The largest corporate pay package in history, if he hits the targets over the next decade.
This article was originally published on 9 November 2025 on The Brief at sebsauerborn.com.
The internet exploded. The left called it obscene. The libertarian right called it a triumph of shareholder capitalism. The financial press produced seventeen different takes on what it means for governance.
Here is mine.
Let's Start With What It Actually Is
First, some precision. This is not a cheque for a trillion dollars. It is a stock award — options that vest only if Tesla hits a series of extremely ambitious financial and operational milestones over ten years. If Tesla does not hit those milestones, Musk gets nothing.
This is important. The outrage about the "trillion dollar payday" mostly ignores this structure. Musk gets the money only if he creates far more than that in value for shareholders.
Tesla reincorporated in Texas, held a new shareholder vote, and the package passed again. The shareholders want Musk. They voted for this. Twice.
The Harder Question
But here is where I will push back on the libertarian celebration of this.
The shareholder capitalism argument works cleanly when shareholders have full information and genuine choice. In the case of a company like Tesla, with a charismatic founder whose personal brand is inseparable from the company's value, neither of those conditions fully applies.
Retail investors who own Tesla shares do not vote in a vacuum. They vote with one eye on whether their opposition might cause Musk to leave, which might tank the stock, which might hurt their retirement savings. That is not free choice. That is a hostage negotiation.
And there is a deeper question about concentration of power. Musk now controls Tesla, SpaceX, X (formerly Twitter), and has significant political influence in Washington through his relationship with the Trump administration. One man, with one trillion dollars in potential compensation tied to one company's performance, exercising influence over social media, space infrastructure, electric vehicles, and US government policy simultaneously.
That is not the picture of a free market. That is the picture of a new kind of oligarchy — one that emerged from free markets but now operates well beyond them.
What I Actually Think About Musk
I find Musk genuinely interesting and genuinely problematic in roughly equal measure.
The things he has built — Tesla, SpaceX, Starlink — are remarkable. Starlink, in particular, has changed the game for anyone living or operating in remote locations, including on the ranch in Texas. I use it. It works. It is better than anything a government programme could have produced in the same timeframe.
His purchase of Twitter and the subsequent restoration of voices that had been silenced — including, frankly, many voices I agree with more than their replacements — was a net positive for free speech, in my view.
But the combination of that media platform, the government contracts, the Washington influence, and now this compensation structure creates something that should make anyone who cares about genuine liberty slightly uncomfortable.
Concentrated power is dangerous. Full stop. Even when it is in the hands of someone you like.
The Tax Angle
Because I cannot help myself: if and when Musk actually realises any of this compensation, the tax implications will be extraordinary.
Texas has no state income tax. Good start. But federal capital gains tax, depending on the structure and timing, could be significant. And given that Musk has already made noise about his relationship with the US tax system, expect this to become a political football.
The reality is simpler: he built remarkable things, the shareholders want him to keep building them, and they have structured an incentive to make that happen. Whether it works remains to be seen.
Work with Sebastian
High compensation events — business sales, IPOs, major stock vesting — create significant tax exposure. The structure you have in place before the event determines almost everything. If a liquidity event is on your horizon, the time to plan is now, not after. Book a consultation.