Elon Musk's new compensation package at Tesla is entirely performance-based, with no guaranteed salary or bonus. The potential payout could reach $55.8 billion, contingent upon Tesla achieving aggressive market capitalization and financial goals over the next decade.
This compensation plan signifies Tesla's ambitious goals to rival major tech companies like Microsoft, Google, and Apple. The full payout is only achievable if Tesla's market capitalization surpasses $650 billion, a significant increase from its current valuation. This high-stakes approach is viewed by some experts as a message of Tesla's aggressive growth targets.
Musk's compensation is structured to align his interests with shareholders. He is required to hold his shares for five years after receiving them, preventing short-term stock manipulation. Experts note that this 100% performance-based approach is rare and designed to encourage long-term growth.
This announcement comes amidst production challenges at Tesla, including delays in Model 3 production. Concerns about Tesla's long-term viability have been raised by some, but the board explicitly stated its belief in Musk's continued leadership.
Musk's potential payout dwarfs recent CEO compensation packages at other major companies like Apple and Expedia. While other packages included some guaranteed compensation, Musk's is entirely dependent on Tesla's success.