Elon Musk: 55 Billion Reasons To Make Tesla Succeed

Aggressive, audacious, bristling with risk. That describes Tesla Chief Executive Elon Musk. It also describes the pay plan Tesla's board of directors wants to grant him.

In a special meeting to be held Wednesday, shareholders will decide in a binding vote whether they'll go along.

Even by the Olympian standards of executive pay, the Musk plan is a jaw dropper. The deal could allow Musk [pictured above] to take in more than $55 billion over its 10-year duration.

Other outsized pay plans -- such as Apple Chief Executive Tim Cook's 10-year, nearly $400-million stock option plan, or Disney Chief Executive Robert Iger's $100-million deal last December -- pale by comparison.

The Musk plan is unusual in other ways. It's a pure performance package: no salary, no bonus, no stock grants based on showing up for work. Only stock options will be offered, pegged to Musk's ability to elevate Tesla's total market value far above its current $56 billion while boosting revenue and, eventually, profit.

Musk's existing pay plan, formulated in 2012, likewise is based mainly on stock options linked to performance. But the focus has been on making sure products get out to market, and less on financial metrics. Options accounted for much of the 22% share of the company he now owns. Under the new plan, he will no longer be offered a salary, which amounted to just $49,720 in 2017.

For maximum payout, the new plan requires Musk to multiply Tesla's market value twelvefold, to $650 billion.

The plan is contingent on Musk remaining at the company, though not necessarily as CEO, and meeting a series of milestones based on either revenue or profit. If he can't hit any of them -- because, say, Tesla proves unable to fix serious production problems hampering sales of its new Model 3 electric sedan and revenue falls short...

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Elon Musk: 55 Billion Reasons To Make Tesla Succeed

Aggressive, audacious, bristling with risk. That describes Tesla Chief Executive Elon Musk. It also describes the pay plan Tesla's board of directors wants to grant him.

In a special meeting to be held Wednesday, shareholders will decide in a binding vote whether they'll go along.

Even by the Olympian standards of executive pay, the Musk plan is a jaw dropper. The deal could allow Musk [pictured above] to take in more than $55 billion over its 10-year duration.

Other outsized pay plans -- such as Apple Chief Executive Tim Cook's 10-year, nearly $400-million stock option plan, or Disney Chief Executive Robert Iger's $100-million deal last December -- pale by comparison.

The Musk plan is unusual in other ways. It's a pure performance package: no salary, no bonus, no stock grants based on showing up for work. Only stock options will be offered, pegged to Musk's ability to elevate Tesla's total market value far above its current $56 billion while boosting revenue and, eventually, profit.

Musk's existing pay plan, formulated in 2012, likewise is based mainly on stock options linked to performance. But the focus has been on making sure products get out to market, and less on financial metrics. Options accounted for much of the 22% share of the company he now owns. Under the new plan, he will no longer be offered a salary, which amounted to just $49,720 in 2017.

For maximum payout, the new plan requires Musk to multiply Tesla's market value twelvefold, to $650 billion.

The plan is contingent on Musk remaining at the company, though not necessarily as CEO, and meeting a series of milestones based on either revenue or profit. If he can't hit any of them -- because, say, Tesla proves unable to fix serious production problems hampering sales of its new Model 3 electric sedan and revenue falls short...

Comments are closed.