(Reuters) – The Tesla board of directors proposed a new compensation agreement for the director general Elon Musk, estimated at around $ 1,000 billion (854.19 billion euros) over ten years.

The proposed agreement, which if it is approved would be the most important in the history of the manufacturer of electric vehicles, underlines Tesla’s commitment to Elon Musk to carry out its transformation into a technological power.

The billionaire’s remuneration should be linked to ambitious performance objectives, including the growth of products based on artificial intelligence and autonomous systems.

The richest man in the world has continued to ask for more participation in the company in order to exercise better control, even though the legal battle around his remuneration in 2018, then estimated at only $ 56 billion, continues. The new premium proposed is approximately 18 times higher than the disputed plan and is similar to the current stock market valuation.

The plan underlines Tesla’s dependence on Elon Musk while the company is faced with the slowdown in the demand for electric vehicles, the growing competition from Chinese rivals and the pressure exerted for it to achieve its AI ambitions.

“Although a daring remuneration linked to performance is not new, the magnitude of this place Place La Barre very high in terms of incentives for the Director General and will dominate the debates in the consulting rooms all over the world,” said Adam Sarhan, managing director of 50 Park Investments in New York.

According to the plan, “the traditional remuneration granted to managers of other companies have been deemed inappropriate to design the incentive remuneration of Elon Musk”.

Elon Musk has transformed Tesla, a startup specializing in electric vehicles, into the most profitable automotive company in the world, increasing its production, developing on a global scale and pushing the industry to turn to electric mobility.

However, Tesla recently lost ground to its Chinese rival byd and other car manufacturers, in a context of slowing down the demand for electric vehicles and increasing competition on key markets.

Supporters of Elon Musk’s disproportionate remuneration argued that she was aligned with long -term growth, while criticisms warned of potential dilution risks and governance.

“This is ridiculously high remuneration. It raises many questions, but last year, Elon Musk transferred Tesla from Delaware to Texas to avoid all these questions,” said Brian Quinn, professor at Boston College Law School.

“Since the Tesla action price is mainly dictated by the mood of the market and that it seems to have very little to do with the actual performance of the automaker, I think they will approve this plan.”

Under the terms of the contract, Elon Musk will be able to increase his participation significantly if all the objectives are achieved, which would give it even greater control.

Remuneration details

The proposed plan would grant Elon Musk up to 12% of Tesla’s shares, a value of around 1 .030 billion dollars if the company reaches its target market capitalization of 8 .600 billion dollars. The plan plans to multiply the value of Tesla by almost eight, or about 7.500 billion dollars, during the next decade.

If it is fully allocated, this premium will significantly increase the voting rights of Elon Musk, which currently holds around 13% of the capital, which will intensify the debate on governance and succession.

The Board of Directors specified that the premium would be awarded by tranches, linked to market capitalization and operational stages, such as mass production of taxi robots and humanoid robots.

Tesla stressed that Elon Musk would not receive any salary or cash bonus, the entire remuneration being linked to performance, which echoes the structure of its 2018 plan.

At Wall Street, the Tesla title took 2.07% at 345.54 dollars at 15:02 GMT.

Tesla’s board of directors approved a provisional remuneration program earlier this year for Elon Musk, worth around 29 billion dollars in limited shares, designed to keep it at the head of the company at least until 2030, while it is oriented towards a “IA first” strategy.

The Tesla action reached a record level at the end of last year after the return of Donald Trump to the presidency, investors anticipating a relaxation of the regulations likely to accelerate the deployment of Robotaxis. However, the title of title has since backed up due to the political quarrel between Elon Musk and the American president.

“It really seems that Elon obtains from the Board of Directors and its shareholders what he wants,” said Douglas Chia, president of Soundboard Governance, an independent company of corporate governance consulting. “As ridiculous as it is, they will adopt it, I have no doubt.”

(Written by Akash Sriram, Shashwat Chauhan, Jaspreet Singh and Harshita Mary Varghese in Bangalore, with Ross Kerber in Boston; Diana Mandia and Elena Smirnova; edited by Augustin Turpin and Kate Entringer)

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