San Francisco: Tesla chief Elon Musk will only get paid if the company’s stock soars but would receive a stunning sum if it does, according to a plan approved by shareholders on Wednesday.
A Tesla spokesperson confirmed that shareholders voted to approve the proposal for a multi-billion-dollar, 10-year performance stock award “entirely contingent on achieving market cap and operational milestones that would make Tesla one of the most valuable companies in the world.”
If goals are hit, the compensation in shares could top $50 billion.
For Musk to get the maximum, Tesla’s stock market value would have to grow to $650 billion, an increase of some $600 billion from current levels, and certain revenue and profitability goals would also have to be achieved.
The new package, using shares which “vest” based on certain criteria, is modelled after a similar deal created in 2012, after which Tesla’s market value increased by more than 17-fold.
Tesla stressed that Musk will “receive no guaranteed compensation of any kind — no salary, no cash bonuses, and no equity that vests simply by the passage of time.”
Instead, according to the California-based company, Musk will only be compensated for his job if shareholders “do extraordinarily well.”
A pair of large institutional investors reportedly opposed the pay plan due to its size and questions as to whether it would actually motivate Musk.
The package for Musk, 46, features a 10-year grant of stock options which vest in 12 tranches. — AFP
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