It’s always been understood that Elon Musk would remain in the CEO chair at Tesla until his three-part master plan was realized. “What the world really needs is a great, affordable electric car,” Musk told Bloomberg in 2013. “I’m not going to let anything go, no matter what people offer, until I complete that mission.”

Once Tesla made the mass-market EV a reality, might Musk consider stepping down as chief executive? He stoked speculation in 2014 when he said, “I will certainly be the CEO for the next four or five years, and it’s TBD after that.”

Well, Model 3 is now on the road, and Mr. Musk has made his decision: He recently told the New York Times that he has agreed to stay on as CEO at Tesla for the next decade.

Furthermore, his new compensation plan is “perhaps the most radical in corporate history,” as the NYT put it. Musk will be paid only if Tesla reaches a series of ambitious market value milestones – otherwise, he will be paid nothing.

Tesla has set a dozen market value targets, in increments of $50 billion, starting at $100 billion, then $150 billion, and so on up to a market cap of $650 billion. Also, the company has set a dozen revenue and profit goals. Mr. Musk will receive 1.68 million shares, or about 1 percent of the company, only if he reaches both sets of milestones. Tesla’s current market cap is about $59 billion.

If Musk succeeds in increasing the value of Tesla to $650 billion – a figure that would make Tesla one of the five largest companies in the US – his stock award could be worth as much as $55 billion.

“If all that happens over the next 10 years is that Tesla’s value grows by 80 or 90 percent, then my amount of compensation would be zero,” he said. “I actually see the potential for Tesla to become a trillion-dollar company within a 10-year period.”

Tesla’s executive compensation policy is about as shareholder-friendly as they come, in contrast to those at many other corporations, which richly reward CEOs even when the companies underperform. If the benchmarks are reached, the company’s employees, including those who work on the factory floor, who get paid in both cash and stock, could also become wealthy.

Musk’s new compensation plan is similar to the previous one put in place in 2012, but now the numbers are much larger. Mr. Musk has reached all but one of the metrics in the previous plan.

Musk has not sold any of his Tesla shares, except to pay taxes. His current stake is worth $13 billion. He receives a salary of about $37,000 annually. “I don’t cash it,” he said. “It just ends up accumulating in a Tesla bank account somewhere.”

Source: New York Times, Bloomberg