Elon Musk: I’m not going to pay myself until Tesla hits absolutely insane benchmarks
Yesterday, Tesla announced a 10-year performance plan for CEO Elon Musk… and in classic Muskian fashion, it’s a little out there.
According to the company, the big boss’s compensation package will be “entirely contingent” on whether Tesla reaches a series of astronomical financial milestones, including a $650B valuation.
It’s a “100% at-risk performance award” — and if Elon manages to hit his goals, he could add as much as $55B to his net worth.
The fine print
Tesla’s set 12 big targets for Musk to hit, each consisting of both market cap and operational goals. For each target hit, he’ll be permitted to vest 1.69m Tesla shares (or 1% of the company). If he fails to reach his goals, he won’t be compensated at all.
The market cap targets will increase in $50B increments, with the ultimate goal of a $650B market value.
Tesla’s current value sits around $59B — which would make them one of the 5 largest companies in the US if they reach their goal. A little lofty…
But hey, it’s worked for Musk in the past
Back in 2012, the Elon-gator rigged up a similar payment plan for himself, contingent on hitting 10 valuation benchmarks in $4B increments. People thought he was crazy at the time — but then he hit 9 of the 10 and increased Tesla’s market cap by 17x.
This time around, the stakes are higher: Musk needs that payout if he wants to hit some of his personal goals… like building a hyperloop and putting people on Mars.