Tesla announced Tuesday that it would pay Musk nothing for the next 10 years—no salary, bonus, or stock—unless the electric car company nearly doubles in value.
I'm a big fan of Elon's work. Someone who always insisted clean technology is very important.
Elon is a selfless billionaire, who has served as Tesla’s chairman since 2004 and as its CEO since 2008, never took any salary. Musk is worth an estimated $21.5 billion, has decided refuse his annual paycheck of $56,000—California minimum wage—in 2018 and the decade thereafter.
Under the new financial layout, visionary Musk and share holders could actually become much, much richer.
To achieve that Musk must grow Tesla to $100 billion in market cap (Current market cap: $59 billion) also increase its revenues or adjusted earnings (EBITDA) by at least 70%. This is first step of the 12-level compensation plan, allowing Musk to pick up stocks worth an additional $1 billion. Cool Right!! but wait there is more to this..
Musk also has the opportunity to grab bigger chunk of the cake. If Tesla’s market value touches $650 billion mark which is 11 times the current, by 2028—and if the other financial indexes multiply between 15 and 21 times—Musk will get an additional $55.8 billion, according to the company.
Wow!! that's amazing right. Not over yet. There is cherry on the top.
Musk’s real reward will be something bigger. After all, the ambitious CEO is also Tesla’s largest shareholder, and if he clears all 12 performance hurdles, the company calculates Musk would own around 28.3% of Tesla. With that large a stake of an astounding $650 billion company, Musk’s net worth would rise to $184 billion in Tesla stock alone - making him the richest person in the world but that being said there are a lot of uncertainties we can not ignore. It is high end positive case scenario. Competition is heating up in the space which can change things a bit.
Let me know what do you think in the comment section below.
Sources:
https://www.theverge.com/2018/1/23/16922758/elon-musk-compensation-tesla
http://www.latimes.com/business/la-fi-hy-tesla-musk-pay-20180123-story.html
I thought California minimum wage was $11 to $11.50 per hour in 2018. $56K?
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I wonder, if like Tesla before him, Elon will have to tear up his contract to avoid bankrupting the company.
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