Tesla car maker founder Elon Musk will become the world’s richest man if he can drive the company on to a $650 billion business in just 10 years.
The CEO and founder of electric car company Tesla will become the world’s wealthiest individual if an incentive scheme to grow the business comes to fruition.
The deal is quite simple.
Musk, 46, is already a billionaire and has agreed to take no pay for a decade.
If he hits pre-determined performance milestones along the way, he will qualify for a massive £40 billion bonus at the end of the 10-year contract.
“Elon will receive no guaranteed compensation of any kind – no salary, no cash bonuses, and no equity that vests by the passage of time,” said a company spokesman. “Instead, Elon’s only compensation will be a 100% at-risk performance award, which ensures that he will be compensated only if Tesla and all of our stockholders do extraordinarily well.
“For Elon to fully vest in the award, Tesla’s market cap must increase to $650bn.”
Tesla is currently worth around $60 billion.
On today’s stock exchanges, only three companies are worth more than the $650 billion target – Apple ($908 billion), Google’s parent company, Alphabet ($807 billion) and Microsoft ($707 billion).
“We believe Tesla has a unique opportunity to continue delivering stockholder value,” Tesla’s board, wrote to shareholders.
“Our aspirations may appear ambitious to some, and impossible to others, and that is by design. We like setting challenging, hard-to-achieve goals for ourselves, and then focusing our efforts to make them happen. This is why we based this new award on stretch goals and why we gave Elon the ability to share in the upside in a way that is commensurate with the difficulty of achieving them.”
The award pays out in 12 tranches, depending on market capitalisation and revenue targets. To collect the first pay out of 1% of the company’s shares – worth about $600 million at today’s prices – Tesla’s market value must hit $100 billion.
Musk will collect additional 1% stock grants for every additional $50 billion increase in market value.