The Tesla Inc. board defended what its lawyers termed Elon Musk’s “unusual and audacious” pay package in a motion last week to dismiss a derivative challenge to a compensation scheme that could make the electric car manufacturer’s CEO one of the most highly compensated public-company executives in the world.

In the filing, made public on Sept. 7, Musk and the Tesla directors said the Silicon Valley magnate would only receive the full $55.8 billion payout in stock options if he reaches each of the 12 market capitalization and operational milestones to up Tesla’s value to $650 billion and achieve unprecedented revenues and profits within the next 10 years.