As Tesla promotes a more sustainable transportation system, it hopes to demonstrate a more egalitarian pay policy, at least for its CEO. While overpaid and underperforming executives are drawing the ire of the public (and one presidential candidate), Elon Musk has a compensation plan that’s not only good for him, but also for the company’s shareholders and workers, in the opinion of MarketWatch.
Musk earns a $37,584 salary, which he doesn’t accept, and no cash bonus. He does stand to receive a tidy $1.6 billion in of stock options by 2022, but his compensation “brilliantly balances Musk’s incentives to do well and do good,” as MarketWatch puts it.
The Seer of Silicon Valley’s pay packet is tied not only to the TSLA stock price, but to targets for bringing products to market. Musk gets 10% of his options every time Tesla adds $4 billion in stock market value, but only if the company also meets an operational goal, such as getting each new model through development and on to the market, and reaching sales milestones of 100,000, 200,000 and 300,000 cars.
So far, Tesla has met seven of its market-cap milestones and five of its operating milestones, and only half of Musk’s options have vested. The company is on track to meet its goals, however. The pile of Model 3 orders already in the book should allow the company to handily dispatch the sales targets, ensuring that Musk will have another opportunity to go sip mai-tais on a private island if he so desires (he won’t).
Things are done a bit differently at Ford (for example), where CEO Mark Fields got a total of $18.6 million in 2015, even though the company’s stock underperformed.
Image: Jurvetson (flickr)