Tesla shareholders approve Elon Musk's $1 trillion compensation package, but he won't get it right away
Tesla shareholders overwhelmingly approved a compensation package for CEO Elon Musk that could reach $1 trillion in company stock.
Tesla shareholders overwhelmingly approved a compensation package for CEO Elon Musk that could reach $1 trillion in company stock.
This decision was supported by more than 75% of shareholders, writes TechCrunch.
Under the deal, Musk won’t get $1 trillion right away. He won’t get a salary either. But he could earn hundreds of billions of dollars and gain greater control over Tesla if he can help the company achieve a number of important goals while increasing its profits. Some of these hurdles will be difficult to overcome. But many of them are simply watered-down versions of promises Musk has made for years.
The compensation package is broken down into 12 tranches that cover operating goals, adjusted profit goals, and market capitalization goals. Each tranche grants Musk more shares if those goals are met. For example, Tesla, which has a market capitalization of about $1.5 trillion today, would have to gradually increase that valuation to reach $8.5 trillion over the course of a decade .
The vote came after two months of aggressive campaigning by Tesla, its board of directors and many of its executives. The company has repeatedly made public appeals to shareholders to approve the package. Chairman Robin Denholm, who usually avoids the media, has given several interviews to major news outlets. Tesla even ran television ads about the vote — something it doesn’t even do for its cars.
Musk encouraged shareholders to approve the package because, he said, it was the easiest way to give him more voting control over the company. He currently owns about 15%, but he has threatened (several times) to leave Tesla unless he has about 25% control. Musk said that this stake would protect him from being removed from his position and losing control of the “army of robots” that Tesla is building .
Tesla lobbied hard for the package, in particular by showcasing the company’s Master Plan 4 as a visionary statement of where Musk could take things. The document, released in September, was vague and unspecific—a criticism that even Musk himself agreed with. He claimed that Tesla would add more specifics to the “Plan” just days after its release, but nothing has changed in the months since.
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