Tesla’s Elon Musk May Have Boldest Pay Plan in Corporate History
- 6 years ago
Tesla’s Elon Musk May Have Boldest Pay Plan in Corporate History
If Mr. Musk were somehow to increase the value of Tesla to $650 billion — a figure many experts would contend is laughably impossible
and would make Tesla one of the five largest companies in the United States, based on current valuations — his stock award could be worth as much as $55 billion (assuming the company does not issue any more shares over the next decade, which is unrealistic).
Tesla has set a dozen targets, each $50 billion more than the next, starting at $100 billion, then $150 billion, then $200 billion
and so on, all the way to a market value of $650 billion.
The company is planning to announce on Tuesday Mr. Musk’s new compensation plan,
and it is perhaps the most radical in corporate history: Mr. Musk will be paid only if he reaches a series of jaw-dropping milestones based on the company’s market value and operations.
Mr. Musk insists that the loans are such a small portion of his stake in the company
that even if Tesla shares were to fall precipitously, it would not impact him or the company.
Mr. Musk’s new compensation plan is similar to the previous one put in place when the company was worth $3.2 billion in 2012.
Asked how he thinks shareholders should feel about Mr. Musk’s new pay package, Ira Ehrenpreis, chairman of Tesla’s compensation committee,
told me, “It’s heads you win, tails you don’t lose,” meaning if Mr. Musk is gaining billions then shareholders are winning, too.
If Mr. Musk were somehow to increase the value of Tesla to $650 billion — a figure many experts would contend is laughably impossible
and would make Tesla one of the five largest companies in the United States, based on current valuations — his stock award could be worth as much as $55 billion (assuming the company does not issue any more shares over the next decade, which is unrealistic).
Tesla has set a dozen targets, each $50 billion more than the next, starting at $100 billion, then $150 billion, then $200 billion
and so on, all the way to a market value of $650 billion.
The company is planning to announce on Tuesday Mr. Musk’s new compensation plan,
and it is perhaps the most radical in corporate history: Mr. Musk will be paid only if he reaches a series of jaw-dropping milestones based on the company’s market value and operations.
Mr. Musk insists that the loans are such a small portion of his stake in the company
that even if Tesla shares were to fall precipitously, it would not impact him or the company.
Mr. Musk’s new compensation plan is similar to the previous one put in place when the company was worth $3.2 billion in 2012.
Asked how he thinks shareholders should feel about Mr. Musk’s new pay package, Ira Ehrenpreis, chairman of Tesla’s compensation committee,
told me, “It’s heads you win, tails you don’t lose,” meaning if Mr. Musk is gaining billions then shareholders are winning, too.