Elon Musk’s pay tied to Tesla’s market capitalization targets

Tesla stated that its Chief Executive’s pay, including salary, cash bonuses is tied to the firm’s operational milestones.

On Tuesday, Tesla Inc stated that the renumeration of its CEO, Elon Musk will be paid if the firm and its shareholders do extraordinarily well.

Musk’s compensation will be based on a combination of market capitalization and operational milestones, said Tesla in a statement.

“Elon (Musk) will receive no guaranteed compensation of any kind – no salary, no cash bonuses, and no equity that vests simply by the passage of time,” said Tesla.

Tesla further went on to add, Musk’s compensation consists of a 10-year grant of stock options that vest in 12 tranches, with each tranche vesting only if both market capitalization and operational milestones are met.

Its market capitalization must increase to $100 billion to activate the first tranche; subsequently the firm’s market capitalization must continue to grow in increments of $50 billion.

“Thus, for Elon to fully vest in the award, Tesla’s market cap must increase to $650 billion,” said Tesla.

In order to meet these operational milestones, Tesla will have to meet a set of escalating revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) targets.


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