Elon Musk’s last pay package could wipe out Tesla’s years of profits

Elon Musk’s last pay package could wipe out Tesla’s years of profits, raising sharp concerns across Wall Street as the CEO’s blockbuster compensation plan faces its final legal showdown. 

The issue resurfaced after a Delaware Supreme Court review began examining the lower-court ruling that previously struck down Musk’s 2018 pay package, a deal that now looms as a massive financial risk for Tesla.

According to analysts, if Tesla loses the appeal, the company could be forced to take a $26 billion accounting hit over just two years, reflecting the cost of a replacement compensation package tied to today’s much higher stock price. 

That staggering figure represents more than half of Tesla’s total net income since it first turned profitable in 2019.

Even if Tesla ultimately wins, Musk’s newly approved trillion-dollar pay package brings its own hazards. 

Achieving each performance milestone could trigger billions in stock-based expenses, further squeezing profits at a time when Tesla is already battling falling EV sales, shrinking margins and soaring R&D costs tied to its robotics ambitions.

Experts have argued that the scale of Musk’s compensation creates unprecedented earnings volatility for Tesla, far beyond what any other public company faces. 

As the legal and financial dust settles, Tesla investors are watching closely, because the outcome could shape the company’s profit story for years to come.