Ilon Mask will lose his salary in Tesla. Pay will only for the result

By: Bohdan Chub | 24.01.2018, 11:10
Ilon Mask will lose his salary in Tesla. Pay will only for the result

The Board of Directors of Tesla presented a plan according to which the general director of the company Ilon Mask will remain without salary and will receive compensation for the achievement of certain financial indicators. He has an ambitious goal - to increase the market capitalization of the automaker from the current $ 59 billion to $ 650 billion over the next 10 years.

All or nothing

Tesla CEO Performance Award.jpg

For the entire period Ilon Mask can receive up to 12 payments in the amount of 1% of Tesla shares (at current quotes such a package costs about $ 600 million). The first tranche will be allocated when the company's value grows to $ 100 billion, and the rest - as the capitalization grows for every $ 50 billion. In addition, there are targets for the growth of operational indicators. If at least one of the conditions is not met, the CEO will have to be paid salary in SpaceX. Actually, not the worst option.

The declared $ 650 billion is almost 3 times more than the capitalization of the world's largest automaker Toyota ($ 227 billion). Today, only three American companies are more expensive: Apple ($ 900 billion), Alphabet ($ 815) and Microsoft ($ 709 billion).

Voting of shareholders for a new reward system will be held at the end of March. Neither Ilon Mask nor his brother Kimbal will participate in it.

Proven scheme

The new plan is reminiscent of the 2012 agreement, under which the Mask options also depended on Tesla's financial performance and the growth rate of electric car production. He successfully fulfilled 9 of 10 operational goals and for five years increased the company's capitalization by 17 times.

At the end of 2017, Ilon Mask entered the top-five of the highest-paid top managers, earning 99.7 million dollars. Of these, for a salary in Tesla had only 46 thousand dollars.

Source: Tesla