Elite worker pay moves into the stratosphere as Tesla offers $1 trillion package to retain Musk

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Over three decades ago, when I was in my fifth year as a recruiter, a conversation with my mother took an unexpected turn – into unfamiliar territory, specifically, my pay.

The ensuing discussion revealed that I was out-earning my father, a career public servant, nearing retirement.

I remember being struck with a sense of unease that my on-the-job acquired skill set of interviewing job seekers, making phone calls to find hiring managers who wanted workers with the skills I could supply, and successfully matching the two parties was better paid than a highly trained tax auditor with 40 years’ experience who ensured entities paid the legally-required amount of tax.

This was the moment it finally hit me that demand and supply in the labour market determine a worker’s earnings. There was no ‘ethical’ or ‘fair’ standard set by ‘society’ that determined pay.

Demand and supply in specific labour markets have seen some spectacular new pay benchmarks recently.

Last week, Tesla shareholders approved a new compensation package for CEO Elon Musk, which has the potential to earn him over $1 trillion in U.S. dollars. Yes, you read that right, it’s trillion with a ‘t’. This is not base pay. The performance component of his package means Tesla’s stock value must rise from the current $1.5 trillion to $8.5 trillion for Musk to receive the top end of the range.

To put that into some perspective, the whole Australian economy was worth USD $1.75 trillion in 2024.

Last week, the L.A. Dodgers won their second World Series title in a row, beating the Toronto Blue Jays in an epic playoff series 4–3 after being down 2-3 and facing the fanatical Toronto home crowds for the final two games.

Before the start of the 2024 season, the Dodgers signed Japanese two-way (meaning elite as a batter and a pitcher) sensation Shohei Ohtani from their cross-town rivals, the Angels, for a staggering 10-year USD $700 million (AUD $1.06 billion) deal – the largest ever player contract in professional sport, let alone baseball.

Even before the (then) 29-year-old Ohtani had taken the field for the Dodgers, the L.A. Times speculated that the Dodgers would, at the very least, break even on the deal.

In Ohtani’s first season with the Dodgers, the club won its first full-season World Series since 1988 (their 2020 win was when the MLB had an eight-day season at a single venue due to COVID lockdowns) and Ohtani won the competition’s MVP award for the third time (having won it at the Angels in 2021 and 2023).

According to Joe Pompliano’s Substack the Dodgers’ regular season attendance in 2024 (already #1 in the country) climbed by 2.5% compared to 2023; Ohtani was the most popular name on MLB jersey sales for the second straight year; in 2024 the Dodgers signed 12 Japanese sponsors worth an estimated $30 million; the LA Tourism Board estimates that up to 90% of visitors from Japan stopped by Dodger Stadium at least once during their trip to LA adding thousands of patrons to local hospitality venues; and the Dodgers have hired of six new Japanese-language tour guides to meet the demand for stadium tours from Japanese visitors.

After their 2024 World Series win, it was speculated that the Dodgers were on track to gain a threefold return on Ohtani’s massive contract.

Ohtani’s influence in the recent final series was such that in game three, after he hit two home runs in earlier innings, Ohtani was intentionally walked (pitched unhittable wide balls to concede a ‘free walk‘ to first base rather than risk a home run being hit) the following four times he was at the plate. That made Ohtani the first player in MLB history to be intentionally walked four times in a postseason (finals) game.

Now that Ohtani has played another record-breaking season, there’s no argument anywhere that Ohtani’s incredible individual performances make him look woefully underpaid and clearly the bargain of the Century for the owners of the L.A. Dodgers (although his estimated $100 million per season off-field earnings will ensure he won’t feel hard done by any time soon).

Earlier this year a new Premier League record was set when Manchester City striker, 25-year-old Norway international Erling Haaland signed a nine year contract extension, speculated to be in region of £26 million (approx. AUD $52 million) per season. The contract is the largest player contract in the Premier League’s three-decade history.

Haaland’s first season with the club (2022-23) saw him win the Premier League’s Golden Boot award for most goals scored. His goals helped Manchester City win the coveted treble of competition titles (the Premier League title, the FA Cup, and the Champions League Trophy). The following season (2023-24), Haaland won the Golden Boot award again as City retained the Premier League title. Last season was a relative disappointment with Haaland finishing third in the Golden Boot, and City failed to win any titles.

Haaland is 1.95 metres (6 feet, 5 inches) tall, incredibly fast, strong, and skillful. He is widely regarded as the best striker in world football, and his club manager, Pep Guardiola, believes Haaland will continue to improve from an already high base.

Last month, Australian software engineer Andrew Tulloch reportedly accepted, after previously rejecting, an offer worth up to USD $1.5 billion from Mark Zuckerberg to return to Meta, where he had worked for ten years, until 2023. Meta responded that, “The description of the offer is inaccurate and ridiculous.”

In the race to stay ahead in the GenAI field, Meta and other tech companies are offering unheard-of amounts of money and stock options to workers with the technical capabilities highly valued in the field.

Clearly, Tulloch is an especially highly prized worker in that rarified Silicon Valley air.

This is just the beginning.

There is so much money at stake in so many areas of business and commerce (which includes professional sport), together with increasingly more accurate and meaningful measures of a worker’s contribution to organisation success, which will ensure that the remuneration packages of workers proven to deliver competition-beating output will escalate, relative to median worker pay, at a historically astonishing rate.

Those recruiters who can identify such workers and facilitate their move to another employer will earn remuneration far exceeding any current million-dollar biller benchmark.

You can count on it.

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