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Elon Musk Won't Get Paid By Tesla Unless Company Hits Milestones

Elon Musk Won't Get Paid By Tesla Unless Company Hits Milestones

Tesla unveiled a new CEO performance plan on Monday that says Elon Musk won’t get paid unless Tesla hits a number of ambitious corporate milestones.

Elon Musk is all-in on Tesla’s success. According to the company’s recently revealed CEO performance plan, Musk will receive no guaranteed income or alternate form of compensation (such as company stock). Instead, all his pay will be tied to corporate milestones.

And this isn’t just a situation where he’ll get 50 percent of some astronomically large number if the company only hits 50 percent of its goal. This is an all or nothing deal for Musk. If Tesla doesn’t hit its milestones he takes home bupkis come payday.

It should also be noted that these goals are ambitious in the extreme. Musk is tasked with growing Tesla’s market cap (short for “market capitalization”, or basically how much all the company’s shares are collectively worth) to $650 billion USD in the next 10 years. That puts Tesla on the same playing field as tech giants like Apple and Microsoft, becoming one of the wealthiest companies on the planet.

Tesla
via tunubi.com

Tesla even acknowledged the goals Musk has are ambitious, saying in a statement that the performance plan “ensures that he will be compensated only if Tesla and all of its shareholders do extraordinarily well.”

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The performance plan is relatively simple: the first goal would be to hit a market cap of $100 billion, which is up from Tesla’s current cap of $60 billion. From there, Musk would have to grow the company by $50 billion every year for the next 10 years, or roughly 27 percent annually.

That kind of growth is seen by only a few companies, like the aforementioned Amazon, or Netflix, which actually grew by a staggering 66 percent annually for the past decade.

There’s also revenue and profitability milestones on top of that, but this is a car site and we’re not going to get too far into the nitty-gritty of corporate finance.

Speaking to Reuters, Morgan Stanley analyst Adam Jonas called the move a marketing gimmick to help get the best talent attracted to working at Tesla. “We see Elon Musk’s ambitious long-term awards plan as an aspirational marketing tool to attract talent and capital ahead of an upward inflection in competition” for electric and autonomous vehicles.

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