Elon Musk must make Tesla a $650 billion company, or forfeit his paycheck
CEO pay is based on...well, I don't really know what. But it's almost never based on performance, and many CEOs fail miserably while collecting a huge paycheck. Not Elon Musk.
Tesla, Inc. will announce that its CEO, Elon Musk, plans to make Tesla into T̶h̶e̶ ̶O̶w̶n̶e̶r̶ ̶a̶n̶d̶ ̶R̶u̶l̶e̶r̶ ̶o̶f̶ ̶t̶h̶e̶ ̶U̶n̶i̶v̶e̶r̶s̶e̶ a much more successful company. If he fails at that, he simply doesn’t get paid.
The target for the company is a $650 billion valuation, and it might just happen. Tesla has shot up from a value of $3.2 billion in 2012 to today’s $59 billion.
The market value goals Musk is setting for the company will increase in increments of $50 billion at a time, up to $650 billion, over 10 years. There are also a dozen revenue and adjusted profit goals to meet over the same time period.
If any of the goals are not met, then he doesn’t receive a dime for that period.
Elon Musk, Chairman, CEO and Product Architect of Tesla Motors, addresses a press conference to declare that the Tesla Motors releases v7.0 System in China on a limited basis for its Model S, which will enable self-driving features such as Autosteer for a select group of beta testers on October 23, 2015 in Beijing, China. (Getty Images)
However, if all goals are met…cha-ching! 1.68 million shares, or 1% of the company, is his to keep — a value of at least $70 billion.
In a time of increasingly large “golden parachutes” for even failed CEOs and companies, it’s a radically different approach to compensation.
An added bonus for Tesla employees? They all receive some percentage of Tesla stock, so if it’s indeed that successful after 10 years, then everybody working there will benefit as well.
(And…lest you be concerned about his well-being should the goals remain unmet, he’s worth $20 billion already. So yeah — there’s that.)