Billionaire Elon Musk‘s future compensation from Tesla is now completely dependent upon the electric car company’s future success.
Under a new 10-year plan announced on Tuesday, the Tesla CEO will henceforth receive $0 in salary. Instead, Musk will be rewarded with Tesla stock — but only if 12 specific “operational milestones” are met.
Under the performance-based contract, each time Tesla his a milestone Musk will get the rights to nearly 1.7 million shares of Tesla stock. Over 12 possible installments (if everything goes exceedingly well), this could add significantly to Musk’s already substantial wealth. Musk already owns more than 25 percent of Tesla, and has voting control over the company.
It’s little secret that Tesla — which currently tops the U.S. in electric car sales — has incredible growth ambitions behind a visionary CEO with equally dramatic ambitions, both here on Earth and beyond.
The first of 12 targets is Tesla hitting a value of $100 billion. It’s currently valued at some $60 billion. If all 12 milestones are eventually reached, the company will be worth a whopping $650 billion dollars. This would make Tesla (as of now) the fourth most highly- valued company in the world, behind tech juggernauts Microsoft, Apple, and Alphabet (the parent company of Google).
In order for Tesla to achieve any sort of financial gains — and stop posting massive losses — it’s widely agreed that the company must have substantial success with its first mass-market vehicle, the Model 3. The Model 3 is a smaller sedan intended to be offered at around $35,000 for the majority of potential customers who aren’t interested in (or simply can’t afford) Tesla’s high-end luxury models, notably the Model S.
Musk’s compensation plan, which Tesla claims Musk recused himself from, was developed by its board of directors and the private compensation consulting firm Compensia, Inc. It could very well be a move to appease Tesla’s impatient or concerned investors and underscore Musk’s commitment to not just make the company profitable — but make it immensely successful.
And it’s not as if Musk needs a salary. He’s worth around $20 billion, and owns a cluster of five mansions in Bel-Air.