Tesla has set a dozen targets, each $50 billion more than the next, starting at $100 billion, then $150 billion, then $200 billion and so on, all the way to a market value of $650 billion. In addition, the company has set a dozen revenue and adjusted profit goals. Mr. Musk would receive 1.68 million shares, or about 1 percent of the company, only after he reaches milestones for both.
Mr. Musk’s critics – and there are many – are likely to contend that the new compensation plan is just the company’s latest publicity stunt. He has been called a modern-day P.T. Barnum who has created the illusion of success while consistently missing production estimates.The company continues to lose money; at one point last year, it was losing almost a half-million dollars an hour, according to Bloomberg News. Jim Chanos, a short-seller who has bet against Tesla’s shares – and has thus far been on the losing side of that trade – has contended that Tesla is worthless.
Asked how he thinks shareholders should feel about Mr. Musk’s new pay package, Ira Ehrenpreis, chairman of Tesla’s compensation committee, told me, “It’s heads you win, tails you don’t lose,” meaning if Mr. Musk is gaining billions then shareholders are winning, too. And if Mr. Musk does not perform, shareholders pay nothing.