Tesla has just awarded its CEO Elon Musk the first of 12 compensation plans based on company performance. Musk has just pocketed over $ 700 million. Apart from these rewards depending on Tesla’s development, the CEO does not receive a fixed salary. Tesla said: "As of the date of this document, one of the milestones in [annual] revenues of $ 20 billion and market capitalization of $ 100 billion [over a specified period] has been reached and authenticated by the board of directors."
This compensation program announced in 2018 therefore consists of 12 levels, the last one set in 2028, set at $ 650 billion. If Musk does not receive a standard salary, he still owns 18.5% of Tesla. To get this first pay, Tesla had to reach a market capitalization of $ 100 billion, as well as a turnover of $ 20 billion during the fourth quarter. It's done.
Tesla justifies this system by stating: "We believe that incentives for executive compensation should promote the success of our business and motivate them to pursue the goals of the business. We have focused on structuring compensation incentives to reward clear and easily measurable performance objectives that closely align their incentives with the long-term interests of our shareholders. ”
However, not all shareholders share the same opinion on this system. Indeed, Richard Tornetta even went so far as to sue Tesla by accusing the board of directors of violating his fiduciary duty by approving a plan that unjustly enriches the company's general manager.
Anyway, this system seems to stimulate Elon Musk who redoubles his energy. In recent days he has had to cancel the launch of his Crew Dragon capsule for the ISS, while yesterday we saw him aboard the Tesla Cybertruck passing through the tunnel The Boring Company under Los Angeles.