Elon Musk Threatens to Leave Tesla and Build New EV Company Unless Board Approves $150,000,000,000 Billion Salary

In an explosive twist that could shake the foundations of the global electric vehicle industry, Elon Musk is reportedly threatening to leave Tesla and launch a competing electric vehicle company if Tesla’s board of directors does not approve a staggering $150 billion pay package. The ultimatum has sent shockwaves through financial markets and left investors, regulators, and industry analysts stunned at both the scale of the demand and the potential consequences for Tesla's future.

Musk’s move underscores his growing frustration with Tesla’s governance structure and his unrelenting drive to consolidate control over the company's technological roadmap.

The demand comes amid mounting corporate turmoil at Tesla. The company’s first quarter of 2025 was marked by a 13 percent drop in vehicle sales, extending a downward trajectory that began in 2024. This marks Tesla’s first-ever annual sales decline and has sparked concerns over the long-term viability of its product strategy.

Once a pioneer that defined the EV category, Tesla now faces intensifying competition from legacy automakers and Chinese upstarts, while internal instability grows around its leadership and brand direction.

At the center of the storm is Musk himself, whose increasingly controversial political stance—particularly his role within the Trump administration—and his erratic public behavior have alienated investors and consumers alike. And yet, even in the midst of this turbulence, Musk has decided to leverage his star power and foundational role within Tesla to extract what would be the largest executive compensation package in corporate history.

According to insiders familiar with the ongoing negotiations, Musk is pressuring Tesla’s board to approve a new stock-based compensation plan valued at approximately $150 billion. This new package would replace the voided 2018 deal, which was initially valued at $56 billion and has since grown to over $98 billion based on Tesla’s past stock performance.

That deal was thrown out by Delaware Judge Kathaleen McCormick, who accused Tesla’s board of being “supine servants” to Musk and described the negotiation process as a “sham.”

Despite this legal setback, Musk has doubled down, warning that without a new, even more lucrative compensation agreement, he will begin diverting Tesla’s AI and robotics projects to his other companies, including xAI and possibly a brand-new EV startup that he alone would control.

The implications are enormous: Musk remains Tesla’s most recognizable figure, and a departure would likely trigger a crisis of investor confidence and potentially collapse the company’s already-shaky stock valuation.

The board’s response has been cautious. Chairwoman Robyn Denholm and board member Kathleen Wilson-Thompson have formed a special two-person compensation committee to explore Musk’s demands. However, their ability to push back is seen by many as compromised, particularly given Denholm’s own financial gains from Tesla stock—over $530 million since joining the board in 2018.

In just the past six months, she has sold nearly $200 million worth of shares, raising eyebrows about her incentives and commitment to Tesla’s long-term governance.

Tesla’s board is now navigating a precarious balancing act: appease Musk with a record-breaking compensation package and risk public, legal, and shareholder backlash—or deny his demands and possibly lose the very figurehead most associated with Tesla’s innovation and public identity.

What makes this situation especially volatile is the true cost of Musk’s proposed package. Beyond the headline $150 billion figure, Tesla would be required to account for over $50 billion in expenses on its balance sheet. In addition, Musk would face a 57 percent tax rate on the realized value of the stock options, amounting to more than $28 billion in personal tax obligations. Together, the corporate and tax implications push the total financial burden of the deal to extraordinary heights, potentially disrupting Tesla’s cash flow and investor strategy for years.

Adding to the drama is Musk’s implicit threat to start over—building a rival EV empire outside Tesla. Given his financial resources, engineering talent, and cult-like global following, such a move would not be out of reach. It could even replicate the early-day dynamics of Tesla itself, which began as a disruptor to a stale auto industry.

Musk has already proven through ventures like SpaceX and Neuralink that he’s capable of building entire industries from scratch. A clean-slate EV startup, free from legacy burdens and board oversight, could appeal to his desire for total control and unfettered innovation.

Yet, critics argue that Tesla is not the same company it was in 2010. It is now a publicly traded, globally scaled enterprise with supply chain commitments, factory networks across continents, and shareholder accountability. Walking away from such an institution over compensation would send a dangerous signal to markets about the fragility of modern corporate governance and the power of celebrity CEOs.

Financial analysts are already adjusting their forecasts. JPMorgan and Goldman Sachs have warned that Musk’s departure—even as a hypothetical—could wipe out up to 30 percent of Tesla’s market capitalization.

Retail investors, many of whom see Musk as synonymous with Tesla’s brand, would likely panic, causing volatility not just in Tesla stock but across the broader tech sector. Meanwhile, short sellers are circling the company once again, sensing blood in the water.

Industry rivals are quietly watching with interest. For companies like Ford, GM, BYD, and Rivian, a weakened Tesla could open the door to market share expansion in the United States and abroad. Moreover, if Musk were to build a new company, it could take years to reach production scale—giving competitors a critical window to entrench their own EV dominance.

From a legal perspective, Tesla’s board must also consider the Delaware court’s ruling. Any new pay package must undergo a far more transparent and independent approval process to avoid another legal invalidation. 

This means the board must consult independent advisors, undergo shareholder approval, and provide public justification for the size and structure of any compensation granted to Musk. 

Anything less could spark lawsuits from institutional investors or even further regulatory scrutiny from the SEC.

The situation Tesla faces is not just a boardroom dilemma—it’s a test of what modern capitalism can tolerate. If the company agrees to the $150 billion package, it sets a precedent that could upend compensation norms across industries. If it refuses and Musk walks, it opens the door to a fracture in one of the most iconic brands of the 21st century.

Ultimately, the coming weeks will determine whether Tesla remains Musk’s crown jewel or becomes just another chapter in his portfolio of ventures. For now, one thing is clear: the future of Tesla—and perhaps the electric vehicle movement itself—may hinge on a single number: $150,000,000,000.