Tesla’s face and shining star won’t be leaving any time soon. Elon Musk, the carmaker’s chief executive officer, has agreed to remain CEO for another 10 years.
With the announcement, reported on Tuesday on Musk’s somewhat bewildering new compensation plan. Long story short, it’s all or nothing for Musk. Tesla has set a dozen targets for growth in $50 billion increments. If Musk fails to reach a market-capitalization target, he won’t receive any pay.
Furthermore, the compensation arrangement rewards long-term success, not short-term stock jumps. Musk will have to deliver in spades to reach the company’s ultimate market-cap goal of a colossal $650 billion.
To put that number in context, Tesla would need to valued as one of the five largest companies in the United States, the report said.
In addition to the company-value goals, Tesla also set a dozen revenue and adjusted-profit goals. If Musk succeeds, he will receive about 1.68 million shares, or 1 percent of the company. The compensation scheme could potentially rake in billions for Musk. But, that’s only if he meets the goals, and they are lofty ones.
Then again, no one imagined Tesla would be worth nearly $60 billion today. And, for what it’s worth, Musk reached every single milestone in his previous compensation plan when the company was worth only $3.2 billion in 2012. The company, in fact, has largely achieved what it set out to do over the 10 years starting in 2006.
Musk had originally agreed to stick around as CEO through the Model 3’s launch, but that decade-long commitment has left him as the man in charge of one of Silicon Valley’s most visible startups-turned-big-companies. He will continue to oversee the production ramp-up of the affordable Model 3, then launch a Model Y crossover, the Tesla Semi, a new Roadster, and perhaps even a pickup truck.
Despite Tesla’s success thus far, Musk and the company still garner plenty of naysayers. Outspoken Tesla critic, former GM product czar, and auto industry veteran Bob Lutz said on Thursday that collectors should buy a Model S Lutz continues to paint dark days ahead for the electric carmaker.