Tesla unveiled on Friday a proposed compensation package for Elon Musk that could top $1 trillion if the controversial CEO delivers on his vision for stratospheric growth from new technologies.

The plan potentially provides Musk -- already the world's wealthiest person -- with up to 12 percent of additional total company shares, according to a filing with the US Securities and Exchange Commission. 

To reach the full award, Tesla must reach a market capitalization of "at least $8.5 trillion by 2035," according to the filing, which announced a shareholder vote on the proposal in November. 

Tesla's current market capitalization is just over $1 trillion, down somewhat from its peak following recent weak earnings. Analysts have attributed some of the sales woes to Musk's embrace of far-right politicians, which has sparked criticism.

But Musk has described Tesla's potential growth as nearly boundless, saying in July that if the company delivers on its vision for autonomous driving and artificial intelligence, "Tesla will be the most valuable company in the world by far."

Tesla shares rallied on the announcement of the plan, which directly links Musk's potential pay to long-term shareholder performance, a popular approach with investors.

Earlier this month, Tesla announced an "interim" compensation award worth about $29 billion for Musk, asserting the need to retain the outspoken CEO at a moment of fierce competition for top talent.

The developments come as Tesla challenges a Delaware court ruling that struck down a 2018 package for Musk of about $55.8 billion.

Tesla Chair Robyn Denholm and board member Kathleen Wilson-Thompson described the new package as a "super ambitious incentive package for a pioneering, ambitious and unique CEO" in a letter to shareholders.

"We believe that Elon's singular vision is vital to navigating this critical inflection point," they said in the letter, which also set conditions of having one million robotaxis in commercial operation and one million AI bots.

"If Elon achieves all the performance milestones under this principle-based 2025 CEO Performance Award, his leadership will propel Tesla to become the most valuable company in history."

But Tesla also alluded to the possibility that the unprecedentedly massive pay package may worsen a public backlash to Tesla and Musk, whose fortune is estimated at around $435 billion.

"Adverse public perception of the 2025 CEO Performance Award, even if it is baseless or satisfactorily addressed, may result in negative publicity for Tesla, which could materially and adversely affect our business, results of operations or financial condition," the filing said.

Musk was the most unpopular of 14 public figures polled by Gallup in August. It placed the billionaire just below Israeli leader Benjamin Netanyahu and US President Donald Trump. 

Musk had a 33 percent favorable and 61 percent unfavorable rating, according to the poll.

Series of milestones

To receive the full pay package, Musk must hit 12 milestones related to market capitalization. The first tranche would be available if and when Tesla reaches $2 trillion in market value, with the next nine boosts at an additional $500 billion each in market value.

The plan also involves a series of operating profit and product goals, such as the delivery of 20 million Tesla vehicles. The package aims to ensure Musk stays at Tesla for at least seven-and-a-half years, or 10 years to receive the full award.

The proposed compensation package was included in Tesla's proxy statement for shareholders ahead of an annual meeting on November 6 in Austin.

The full award would lift Musk's overall stake in Tesla to more than 25 percent of total shares.

CFRA analyst Garrett Nelson expects Tesla shareholders to approve the package.

"For Musk to even hit the first tranche, the stock basically has to double in value," Nelson said. "Investors like the fact that the pay package aligns with shareholder interests."

Musk is viewed within the business world as a unique talent after his success with building Tesla and SpaceX into major global companies. 

But his stewardship at Tesla has come under scrutiny in the last year as car sales and profits have tumbled. 

This trend has been partly due to Musk's political efforts, but is also related to a sluggish rollout of new auto models after the polarizing Cybertruck sold poorly. 

After joining the administration of US President Donald Trump in the first months of 2025, Musk has exited Washington following friction with the Republican leader. 

Musk and Trump drew headlines in the spring due to public sniping, but relations between the men have quieted since then.

Shares of Tesla rose 2.5 percent near midday.