Tesla shareholders approve multibillion-dollar Musk pay

If that comes to pass, it would presumably add a nice boost to Musk's fortune, which Forbes estimates at $20.1 billion.

The CEO of Tesla Inc., the electric auto and solar panel maker was approved by the shareholders to receive the stocks that will be worth that much if he meets lofty milestones over the next decade, according to a person briefed on the vote.

A new payment plan for the CEO was approved by Tesla shareholders Wednesday, a spokesperson confirmed. If the plan's accepted and he turns Tesla into both a mass-market automaker and one of the world's largest companies, he'll become perhaps the richest man on the planet.

In order to receive the highest award, Tesla would have to be worth more than 12 times as much as General Motors, the US's largest vehicle manufacturer, is today ($52.9bn).

Two firms that evaluate proxies for investors recommend that shareholders vote against the pay plan, which they say is unprecedented in size for a USA public company. The award will pay out in 12 tranches and will depend on the company hitting a series of revenue and market capitalization targets.

The compensation package includes stock options that could net Musk up to $55.8 billion over a decade that would vest only if operational milestones are achieved.

"If all of these milestones were to be achieved, Tesla will have meaningfully achieved its mission of transitioning the world to sustainable energy and will have become one of the most valuable and successful companies in the world", the board stated in the filing. That's an astronomical sum, compared to what other USA executives make. Some large investors have said the package aligns with their interests, signaling they don't mind if Musk gets wealthier, as long as they also see big returns.

Musk owns approximately 20% of Tesla shares and recused himself from voting, as did his brother, Kimbal, who sits on the Tesla board. You could spread solar systems here that would give you more energy than you need or could need. With a starting price of $35,000, Tesla is targeting a mass market with the Model 3, but has struggled with mass production so far.

The board needed majority approval to make the grant, which likely is the largest one-time compensation deal ever awarded.

The vote comes amid a slump in Tesla's stock performance.

For example, if Tesla hits a $100 billion market cap, Musk will earn $1.4 billion in stock. Tesla's investor communication describes the high-stakes nature of Musk's performance award. Plus the company's solar roofs will have to be successfully integrated into its energy storage business.

But, there won't be a salary or cash bonus involved.

Tesla's stock was down 0.63% this year.

Elon Musk speaks at a press conference following the first launch of a SpaceX Falcon Heavy rocket at the Kennedy Space Center in Cape Canaveral, Florida, U.S., February 6, 2018. That's led to concerns he's looking to lessen his involvement with Tesla. Several top executives have left the company lately, calling into question what Tesla would do if Musk made a decision to do something else.

Tesla previously noted that Musk would not be compensated at all if the company fails to meet any of the benchmarks.


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