Shareholders of electric car and solar panel maker Tesla have approved an ambitious pay package for iconic CEO Elon Musk that could net him more than $50 billion if he meets lofty milestones over the next decade.
A company filing on Wednesday with the US SEC showed shareholders supported the pay deal by a large margin. Tesla says the all-or-nothing package is worth $2.6 billion at current stock values, but that would rise dramatically if Musk meets 12 incremental goals including raising the company’s market capitalization tenfold to $650 billion. Also included are targets to increase adjusted pre-tax income and revenue. If the goals are reached, Tesla would be fourth most valuable US company.
Two firms that evaluate proxies for investors recommend that shareholders vote against the pay plan, which they say is unprecedented in size for a US public company. The firms, Institutional Shareholder Services (ISS) and Glass Lewis, both peg the current value of Musk’s package at $3.7 billion. Tesla has yet to turn a full-year net profit even though it’s been in business for 15 years.
At least two large shareholders and Tesla’s board supported the plan, saying it’s necessary to keep Musk in the fold and reach the goal of switching the world from burning oil for transportation to sustainable electric vehicles.For each of milestones Tesla achieves, Musk, who already owns over 20% of the company, will get stock worth 1% of Tesla. “The shareholders get 99%, Elon gets 1%,” board member Antonio Gracias said
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