News: Elon Musk to reap about $55.8 Billion if he reaches all milestones


Elon Musk to reap about $55.8 Billion if he reaches all milestones

As per latest reports, Tesla has a new compensation plan for Elon Musk which could make him the richest man in the world if he reaches a series milestones based on the companys market value and operations. Otherwise, he will be paid nothing.
Elon Musk to reap about $55.8 Billion if he reaches all milestones

The news about Elon Musk’s new pay plan is out and is being called the most radical move by a company in corporate history.  A $2.6 billion award has been granted to the billionaire founder by Tesla Inc., and apparently, is the largest-ever of its kind.  If fully vested over a decade, stock options would net him as much as $55.8 billion. Along the way, nothing would be guaranteed - zero salary or cash bonuses. And, under the terms of the arrangement, even once his shares vest, he has to hold them an additional five years before he is allowed to sell them. His compensation now depends on the success of the company.

This compensation plan is no illusion and he gets paid only if the company succeeds over the long term with significant gains in market cap. For this, 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. Additionally, the company has also set a dozen revenue and adjusted profit goals. And Musk would receive 1.68 million shares, or about 1 percent of the company, only after he meets targets for both.

“It’s breathtaking both in size and in terms of performance required to earn it,” Steven Hall, managing director of compensation consulting firm Steven Hall & Partners, said of Musk’s grant. “Like everything Musk is involved in, whether it’s building a company from scratch or launching satellites into space, this is beyond expectation.”

These jaw-dropping targets and the linking of Musk’s compensation with their achievement outlines a plan for Tesla to become one of the world's biggest companies. And this move is being referred to be very Musk-like - set big-picture, moonshot end goals, particulars be damned. 

Contrary to the doubts of a few experts, Elon Musk is confident about this new challenge and said, “I actually see the potential for Tesla to become a trillion-dollar company within a 10-year period.”

This award puts rest on the questions about Musk’s long-term future with Tesla since the award is contingent on him remaining the chief executive officer, or executive chairman and chief product officer. In fact, if the award fully vests, Musk would own a 28 percent stake in the company worth about $184 billion, vaulting him to the top of the Bloomberg Billionaires Index.

Read full story

Topics: C-Suite, Compensation & Benefits

Did you find this story helpful?



How do you envision AI transforming your work?