Tesla shareholders approve multibillion-dollar Musk pay

Elon Musk founder CEO and lead designer at SpaceX and co-founder of Tesla
Elon Musk founder CEO and lead designer at SpaceX and co-founder of Tesla
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22 March, 2018

Tesla gave Musk a $2.6 billion stock option award earlier this year.

Tesla will have to increase revenue from $20 billion and eventually hit $175 billion, with adjusted earnings increasing over time from $1.5 billion to $14 billion.

The vote passed despite strong opposition from two proxy advisory firms: Institutional Shareholder Services and Glass Lewis.

Tesla's stock was down 0.63% this year.

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.

If the firm's market value rises to $650 billion over the next 10 years, Musk could ultimately be awarded over $55 billion in stock options.

Here's what Tesla Inc. shareholders just bought for $2.6 billion: a stronger guarantee that Elon Musk will stick around for at least the next decade. As a result, the award indicates that Musk has other ideas for the company, including transforming energy storage through utility-grade applications and the kinds of future-of-mobility plans outlined in his Master Plan, Part Deux. The company is now valued at $54.6bn.

Gracias says shareholders realize that Tesla is often optimistic about hitting production milestones and is working hard to achieve them. "We are sometimes late", he said. "If you wanted to power the entire U.S. with solar panels", he said, "it would take a fairly small corner of Nevada or Texas or Utah; you only need about 100 miles by 100 miles of solar panels to power the entire United States".

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The package is an incentive for Musk to focus on Tesla, which has been a concern for investors.

It's especially similar since Mobileye is also an Israeli company operating in the space of autonomous driving technology. "These issues both potentially undermine the board's given objectives of retaining Musk and further aligning his interests with those of shareholders", ISS wrote.

Conversely, some top investors, including T. Rowe Price Group, said before the vote that they were in favor of the plan.

Young companies like Tesla usually experience incredible growth over short periods, then level off for a period as they regroup, said Todd Saxton, associate professor of strategy and entrepreneurship at Indiana University.

The award, which won't vest unless a set of ambitious financial goals are met, had been cheered by some large Tesla investors who said it would help the CEO drive the business forward. But he doesn't think Musk will do that.

Respond to Elon's claims of abuse, Errol said, rather mockingly, "It's so awful, you can't believe it", before adding, "I drove them to school in a convertible Rolls-Royce Corniche, they had thoroughbred horses to ride and motorbikes at the age of 14". "He'll come as close to winning as he can".

Stockholders of the electric auto and solar panel maker voted on the all-or-nothing package Wednesday in California, where the company is based.


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