Elon Musk is definitely not the kind of guy to back down from a challenge, but this is crazy even for his standard!
He has just accepted the challenge of increasing the value of Tesla to $650 billion in ten years (currently worth $59 billion). If he succeeds, then in ten years he’ll be collecting a cheque worth $7.2 billion in today’s money. On the other hand, he will not receive any guaranteed pay for the time being – his pay will be directly tied to Tesla’s performance.
Tesla says this:
“Elon’s only compensation will be a 100pc at-risk performance award, which ensures that he will be compensated only if Tesla and all of its shareholders do extraordinarily well. Because all Tesla employees are provided equity, this also means that Elon’s compensation is tied to the success of everyone at Tesla.”
This is a massive risk, but one that could place Tesla just below Apple and Alphabet (parent company of Google) in terms of market capitalisation. Apple is currently worth $909 billion and Alphabet $807 billion.
This move on Elon’s part reassures investors that Elon will keep pushing the Tesla brand, despite his other commitments such as Space X, Neuralink, and OpenAI.
“While Tesla has no way of predicting how much dilution there will be, some amount of future dilution is a certainty,” Tesla says
This new plan will begin to lay the foundation for more CEOs in the future. Tesla says:
“[Elon] will continue to lead Tesla’s management over the long-term while also providing the flexibility to bring in another CEO who would report to Elon at some point in the future.”
If Elon succeeds in this plan, Tesla wouldn’t only be biting at the heels of Google and Apple, but would surpass the VW Group, the world’s largest automaker by six times their value.
Do you think he can pull it off? Let me know in the comments below.