Tesla has proposed a landmark compensation package that could make CEO Elon Musk the world’s first trillionaire. The package, which will be voted on by company shareholders at an annual meeting on Nov. 6, will give Musk up to $1 trillion over 10 years if he meets ambitious targets, such as expanding Tesla’s robotaxi operations and boosting the company’s market valuation from about $1 trillion to more than $8 trillion.
All the compensation would be in the form of Tesla shares, reports the New York Times. If approved, the pay package would grant Musk over 423 million additional shares, increasing his control in Tesla to roughly 25%.
Related: Tesla Awards Elon Musk a Massive $29 Billion Pay Package to ‘Retain and Incentivize’ the CEO
“Retaining and incentivizing Elon is fundamental to Tesla achieving these goals and becoming the most valuable company in history,” wrote Robyn Denholm, chair of the Tesla board, and Kathleen Wilson-Thompson, a director on the board, in a letter to shareholders that was reviewed by The Times.
Musk pushed the board to arrange a new compensation package for him, reports Yahoo! Finance, saying that he would focus his time and energy on AI and robotics if he didn’t have roughly 25% voting control at Tesla.
“The new agreement underscores Musk’s iron grip on the automaker, despite the myriad demands on his time,” writes Dana Hull in Bloomberg. Hull points out that in addition to Tesla, Musk oversees four other companies: SpaceX, xAI, Neuralink, and the Boring Co.
Tesla shares rose 1.9% this morning. Tesla stock has fallen 16% this year.
Implications for Small Businesses and Entrepreneurs
While critics like Brad Lander, New York City’s comptroller overseeing pension funds invested in Tesla, say that “Tesla’s captive board once again is rewarding Elon at investors’ expense,” the pay package reveals the incredible value that businesses place on leadership.
On any scale of operation and compensation, experts note that tying key leadership rewards to stretch goals can motivate exceptional performance. In an article for Entrepreneur, Timothy Sykes writes: “The more ambitious the goal, the more motivated you will be to achieve it. SMART goals are great if you know exactly how you’re going to get from point A to point B, but a lot of times, life just doesn’t work that way. It’s much better to just start with a massive and ambitious goal and work it out from there.”
Tesla has proposed a landmark compensation package that could make CEO Elon Musk the world’s first trillionaire. The package, which will be voted on by company shareholders at an annual meeting on Nov. 6, will give Musk up to $1 trillion over 10 years if he meets ambitious targets, such as expanding Tesla’s robotaxi operations and boosting the company’s market valuation from about $1 trillion to more than $8 trillion.
All the compensation would be in the form of Tesla shares, reports the New York Times. If approved, the pay package would grant Musk over 423 million additional shares, increasing his control in Tesla to roughly 25%.
Related: Tesla Awards Elon Musk a Massive $29 Billion Pay Package to ‘Retain and Incentivize’ the CEO
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