- Tesla CEO Elon Musk will now be paid nothing unless he increases his company’s market capitalization and the shareholders do very well.
- Musk’s new compensation plan scraps any promise to hit vehicle production goals, which Tesla has always fallen short of.
- An analyst predicted that Tesla could build 100,000 new Model S cars in 2018, versus 400,000 preorders.
LONDON – Tesla announced on Tuesday a new compensation plan for CEO Elon Musk, and he will not get paid a single dollar unless his company’s shareholders do extremely well.
But unfortunately for the 400,000 or so people who have preordered Teslas, Musk’s compensation won’t be tied to his companies ability to build cars.
Tesla has never hit a production goal in the history of the company. An analyst note from December projected just 100,000 Model S Teslas coming off the line in 2018.
Unlike other car companies, Tesla’s stock has continued to soar over 1,000% since its IPO in 2010.
Instead of focusing on building cars, like GM or Ford does, Musk’s new compensation schedule is “entirely contingent on achieving market cap and operational milestones that would make Tesla one of the most valuable companies in the world,” according to a press release.
For Musk’s compensation to fully vest, “Tesla’s market cap would have to grow to $650 billion (an increase of almost $600 billion), and important revenue and profitability goals would also have to be achieved,” the company said.
“Elon will receive no guaranteed compensation of any kind – no salary, no cash bonuses, and no equity that vests simply by the passage of time,” the release continued.
Is Tesla a car company?
Musk’s previous compensation plan included vehicle production targets alongside milestones in increasing market capitalization, but that clause has been dropped from the new plan.
Tesla did mention plans to Read More Here