PALO ALTO – Tesla has come up with a revolutionary new pay plan for CEO Elon Musk. If shareholders agree to it, Musk may become the world’s first trillionaire. In November, shareholders will vote on the never-before-seen deal, which could be worth up to $1 trillion.
The plan says that Musk may obtain up to 12% of Tesla’s stock, but only if he hits a number of very high performance goals. The main need is that Tesla’s market value must rise to an incredible $8.6 trillion in the following ten years. To do this, the corporation would need to raise its worth by around $7.5 trillion from its current market valuation.
The initiative has sparked a heated debate, with experts and observers giving a wide range of responses. Adam Sarhan, the CEO of 50 Park Investments, said the plan sets a new standard for CEO bonuses and that “it will dominate boardroom debates everywhere.” Brian Quinn, a professor at Boston College Law School, called it a “ridiculously large pay package” and said that the company’s recent shift from Delaware to Texas might be an attempt to dodge the legal issues that such a contract would usually bring up.
People on social media have reacted to the news with both jokes and condemnation. One person quipped that Musk would use the money to “go to Mars,” while another said they were worried that employees were “overworked” and investors were “losing money” while Musk got a huge paycheck. Some people said that the salary package is a clear example of how the rich get richer, while others pointed out how different the financial lives of the rich and poor are.
Musk has been offered a contentious salary package before. Shareholders first agreed to an agreement that was likewise subject to market valuation milestones, but a Delaware court later threw it out. This time, the company is trying to avoid legal problems by relocating its incorporation and making sure that shareholders approve.