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Tesla CEO Elon Musk is known for setting his ambitions outside of this stratosphere, promising to colonize Mars and have self-driving electric cars in our lifetimes. Now, he’s matching his Tesla salary to these ambitions.
Elon Musk’s new salary is an all-or-nothing, billion-dollar deal
In order to get paid by the company that he co-founded and runs, Musk will need to make sure that Tesla grows in $50 billion leaps, according to a regulatory filing on his new pay package reported by The New York Times. Musk told the Times that he has agreed to stay as the company’s CEO for the next decade in exchange for a highly unusual pay package based on market value and operational milestones that Musk must reach.
The rewards are high. If Musk can increase the value of Tesla to $650 billion, one of the milestones his pay package challenges him to meet, he can earn as much as $55 billion over the ten years, or $5.5 billion per year (22 times the 2017 compensation of Walmart’s Marc Lore, who led all CEOs last year). But the risks are equally high. If Musk fails to meet any of his ambitious benchmarks, Musk ends up earning zilch in an unusual all-or-nothing deal.
Is this salary just a publicity stunt? Tesla is currently worth about $59 billion today, so Musk needs to start growing dramatically to meet his first milestone of $100 billion. Musk and Tesla also have a history of setbacks. Tesla reportedly burned through nearly half a million dollars every hour last year and has repeatedly missed production targets.
Musk, the CEO of three companies and whose net worth is around $20 billion, is not hurting for money and is game to gamble away his salary to meet the challenge. “I actually see the potential for Tesla to become a trillion-dollar company within a 10-year period,” he told the Times.
He said his salary is part of his humanitarian vision to get us to Mars: “I want to contribute as much as possible to humanity becoming a multi-planet species … that obviously requires a certain amount of capital.”