Tesla shareholders have put the hard word on Elon Musk “If we don’t get paid, neither do you”.
Tesla Inc stated Elon Musk will receive no guaranteed compensation of any kind, and that he will be paid only if the company and all of its shareholders do extraordinarily well under a new performance award.
“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,” the company said.
An unsurprising ultimatum considering Tesla has yet to make a profit.
The company formed by Martin Eberhard and Marc Tarpenning (later adding Elon Musk, JB Strubel and Ian Wright) will most likely have to diversify its product range and bring its market value or cap up to around the…wait for it… 650 billion dollar mark within 10 years.
The original strategy of the company to target ‘affluent purchasers’ has helped to establish the company but over the longer term has failed to produce a sustainable revenue.
This resulted in the production of more “affordable” Tesla cars for general consumption using the Model 3 range.
Suspicions have arisen that Elon will remain as Tesla’s CEO or serve as both Executive Chairman and Chief Product Officer, in each case with all leadership ultimately reporting to him.
Over the long-term its his will provide flexibility to bring in another CEO who would report to Elon at some point in the future.
The new performance award was created by Tesla’s Board of Directors (with Elon and Kimbal Musk having recused themselves) after more than six months of careful discussion and analysis and in consultation with Compensia, Inc., a third-party compensation consultant.
Although the Board granted this award to Elon on January 21, 2018, its effectiveness is subject to the approval of Tesla’s shareholders, who will be asked to approve it at a special shareholder meeting that will be held in late March.