The Financial Times reported that if Musk achieves a series of goals within 10 years, Tesla will reward him with a $1 billion incentive.
The Tesla board has proposed a new compensation plan, under which the CEO Elon Musk would receive a $1 billion compensation if he achieves a series of challenging goals over the next decade. The plan aims to align Musk's interests with those of investors, and if Tesla's growth stagnates, he would gain nothing.
But the scale of this plan may spark an intense debate about the compensation of the world's richest person. Musk's 2018 compensation agreement with Tesla was rejected by a Delaware judge after a prolonged court battle. He has accumulated a wealth of $374 billion through his holdings in Tesla shares as well as private shares in SpaceX, xAI, Neuralink, and The Boring Company. Musk has repeatedly stated that if he is not given greater voting power, he may reduce his involvement in Tesla or even leave.
Tesla's future performance also requires additional sales of 12 million electric vehicles, 10 million autonomous driving subscriptions, registration and operation of 1 million robotaxis in its robotaxi network, sales of 1 million AI robots, and a 24-fold increase in adjusted earnings to reach $400 billion.
According to the plan announced yesterday, Musk will not receive a salary or bonus, but will receive stock in installments based on the growth of Tesla's market value, along with significant gains in earnings, as well as milestone targets such as selling millions of cars, robotaxis, and AI-driven robots.
Considering Tesla's adjusted earnings of $16.6 billion last year; having sold 8 million cars so far, without any sales of robots or robotaxis, and relatively few so-called full self-driving subscriptions, these high-end goals seem out of reach.
"Retaining and motivating Elon is crucial for Tesla to become the most valuable company in history," wrote Chairman Robyn Denholm in a letter to investors, adding that it would "push our visionary leader to perform at his peak." Achieving the maximum of 423 million shares would be challenging. Musk must increase Tesla's market value from its current $1.09 trillion to $8.5 trillion. This is more than twice the value of the world's most valuable company, NVIDIA (market value of $4.2 trillion).
To achieve his goals, Musk will have to reverse the downward trend in Tesla's stock price, which has fallen 30% this year. Due to strong consumer opposition to Musk's divisive political activism and investor concerns about his discord with President Donald Trump (who has canceled electric vehicle sales incentives), Tesla's sales have declined significantly.
Tesla's board emphasized that Musk's incentives are aligned with investors' interests, and if Tesla's growth stagnates, he would gain nothing.
Original article: www.toutiao.com/article/1842461078256652/
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