The vast majority of the figure represents an accounting-driven valuation tied to the 2025 CEO Performance Award, a 10-year equity package approved by shareholders last year, News.Az reports, citing foreign media.
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No shares under that award had vested as of the filing date, and any shares that do vest are subject to an offset of $334.09 per share unless Musk elects to pay that amount in cash. Musk walked away from 2025 with nothing in realized pay — Tesla cleared none of the required market-value or operational benchmarks — and has collected no salary from the automaker for several years.
About $26.1 billion of the reported total represented the grant date fair value of a separate interim award the Tesla board approved for Musk in August. That award was forfeited in its entirety in April 2026, following the reinstatement of a 2018 compensation package, according to Bloomberg.Tesla acknowledged in the filing that there may be a “significant disconnect” between the reported compensation figure and the value Musk may ultimately realize. The company noted the figures “rely on assumptions and projections made pursuant to accounting rules and which are not necessarily indicative of the actual value that was or may be realized.”
To put the disclosure in perspective, the median annual total compensation for Tesla employees other than Musk in 2025 was $62,786. This results in a pay ratio of 2,522,203 to 1. Based on realized compensation, the ratio was 0 to 1. As of December 31, 2025, Tesla had 135,623 qualifying employees, with about 43% working outside the U.S.
The 2025 CEO Performance Award is structured so that Musk stands to collect only if Tesla’s stock price rises substantially and the company clears a series of operational milestones. Among the targets required to unlock the maximum value: Tesla’s market capitalization would need to reach $8.5 trillion, a threshold that, if cleared along with all other milestones, would push the award’s total value to $1 trillion, according to The Wall Street Journal.
Through Thursday, Tesla shares had dropped roughly 15% on the year, a period during which the S&P 500 advanced more than 5%.
