Tesla’s (TSLA.O) board has proposed a $1 trillion compensation plan for CEO Elon Musk in what would be the largest corporate pay package in history, underscoring the hold Musk has over the carmaker as it attempts to transform into an AI and robotics powerhouse.

The world’s richest person has consistently asked for a bigger stake in the company to gain more control, even as a legal battle over his 2018 pay package – then valued at a mere $56 billion – continues. The newly proposed award is roughly 18 times the size of the contested plan and is close to the company’s current market valuation.

The plan highlights Tesla’s reliance on Musk as it faces slowing EV demand, rising competition from Chinese rivals and pressure to deliver on its AI ambitions.

The regulatory filing puts Musk on a different plane than other technology executives, saying that “traditional compensation packages granted to executives at other companies were determined to not be appropriate for designing Mr. Musk’s incentive compensation.”

Musk transformed Tesla from a niche EV startup into the world’s most valuable automaker, scaling production, expanding globally and pushing the industry toward electric mobility.

Recently, however, Tesla has been losing ground to Chinese rival BYD (002594.SZ) and other automakers amid softening EV demand and intensifying competition in key markets.

Supporters of Musk’s enhanced pay package have argued that his compensation plans have aligned his incentives with long-term growth, while critics have warned of potential dilution and governance risks.

“This is a ridiculously large pay package. It raises lots of questions, but last year Musk moved Tesla from Delaware to Texas in order to avoid all those questions,” said Brian Quinn, professor at Boston College Law School.

“Given that Tesla’s stock price is basically all vibes and appears to have very little to do with the automaker’s actual performance, I suspect they will approve this package.”

The board said the new award could lift his stake significantly if all targets were met, giving him even greater control as Tesla seeks to become the world’s most valuable company.

COMPENSATION DETAILS

The proposed plan would grant Musk up to 12 per cent of Tesla’s stock, worth about $1.03 trillion if the company hits its target market value of $8.6 trillion. The plan requires boosting Tesla’s valuation nearly eightfold, or about $7.5 trillion, over the next decade.

If fully earned, the award would materially increase Musk’s voting power from his roughly 13 per cent stake, intensifying debate over governance and succession.

The board said the award would vest in tranches tied to both market capitalization and operational milestones such as mass production of robotaxis and humanoid robots.

Tesla emphasized that Musk would receive no salary or cash bonus, with all compensation linked to performance, echoing the structure of his 2018 plan.

The company’s shares were up about 2.2 per cent in premarket trading.

Tesla’s board earlier this year approved an interim compensation package for CEO Elon Musk worth about $29 billion in restricted stock, designed to keep him at the helm through at least 2030 as the company pivots to an AI-first strategy.

Tesla has since reincorporated in Texas and is appealing the Delaware ruling, but the company said the new plan reflects shareholder feedback and stronger governance safeguards.