Elon Musk will not receive a salary or cash bonus from Tesla as the company announced that his compensation as CEO is now tied to stock and operational milestones.
Tesla Motors announced the new 10-year CEO Performance Award, saying that their market cap would have to grow to $650 billion (an increase of almost $600 billion) and achieve “important revenue and profitability goals” in order Musk to fully vest in the award.
The new performance award is similar to Musk’s last compensation award which was enabled in 2012, and is divided in 12 tranches. Each one of the tranches will vest only if both market capitalization and operational milestones are met.
Elon Musk was then awarded stock options when he successfully met both market capitalization and operational milestones, including production and developmental targets relating to the Model X and Model 3.
Tesla says that its market capitalization must increase to $100 billion (from roughly $60 billion today) for the first tranche to be vested and must continue to increase in additional $50 billion increments for the remaining 11 tranches.
Apart from Tesla’s CEO, Elon Musk is also the company’s biggest shareholder at the moment, with a 20 percent stake. According to Forbes, Elon Musk’s net worth is about $20 billion.