January 23, 2018
Silicon valley billionaire Elon Musk will get no salary or cash bonuses from Tesla Inc and all his compensation as Chief Executive of the electric car maker will be tied to stock and operational milestones, the company said on Tuesday.
Musk may get no salary unless Tesla hits milestones
Tesla also put to rest speculation that Musk will quit any time soon, saying the milestones required him to remain as CEO or serve as both executive chairman and chief product officer.
“This ensures that Elon will continue to lead Tesla’s management over the long-term while also providing the flexibility to bring in another CEO who would report to Elon at some point in the future,” Tesla said, adding that there was no current intention for this to happen.
Musk’s new long-term remuneration plan, modeled after his 2012 performance award but more directly linked to the company’s performance, was unveiled after Tesla’s much-anticipated Model 3 sedan missed a series of production targets.
The delays and Tesla’s high cash burn rate has worried Wall Street that Musk’s ambition to build the company into a behemoth will severely stretch its production capabilities.
Musk’s only compensation will be a 100 percent at-risk performance award, which ensures that he will be compensated only if Tesla performs “extraordinarily well”, the company said in a statement.
The new performance award consists of a 10-year grant of stock options that vest in 12 tranches that are tied to milestones.
“For Elon to fully vest in the award, Tesla’s market cap must increase to $650 billion,” Tesla said.
The company currently has a market value of roughly $60 billion.
The Palo Alto, California-based company’s market capitalization must increase to $100 billion for the first tranche to vest and must continue to increase in additional $50 billion increments for the remaining 11 tranches, it said.
Musk, also Tesla’s chairman, was an early investor in the company and is now its biggest shareholder with a 20 percent stake.
A serial entrepreneur, he has founded several companies, including rocket maker SpaceX and The Boring Company. His net worth is about $20 billion, according to Forbes.
Musk has vowed that Tesla will become “the best manufacturer on Earth,” helped by a new, highly automated assembly line and a simpler design for its Model 3 sedan. However, production woes have slowed deliveries.
While Tesla’s luxury Model S sedans and Model X SUVs have earned it fans, analysts say the company’s more mass market Model 3 sedan is the key to its success.
Tesla’s shares were up 1 percent in premarket trading. They gained 46 percent last year.
The company said on Tuesday it must meet a set of escalating revenue and adjusted EBITDA targets for Musk to earn compensation tied to the operational milestones.
For each tranche, Musk will vest in stock options that correspond to about 1.69 million shares, or 1 percent of Tesla’s current total outstanding shares.
Tesla said Musk’s new performance award was created by company’s board, in consultation with third party compensation consultant Compensia Inc, and requires the approval of Tesla’s shareholders.
Musk and his brother Kimbal did not participate in the more than six month process. Shareholders, excluding the Musks, will be asked to vote on it in a special shareholder scheduled in late March.
Business
Global Vehicle to Grid Market 10 Year Forecast Report 2024-2034 - Supportive Government Regulations and Financial Incentives for V2G Deployment
DUBLIN, March 18, 2024 /PRNewswire/ -- The "Vehicle to Grid (V2G) Market Report 2024-2034" report has been added to ResearchAndMarkets.com's offering. World revenue for Vehicle-to-Grid (V2G) Market is forecast to surpass US$ 4.31 billion in 2024, with strong revenue growth through to 2034. Escalating Demand for Electricity, Coupled With a Global Commitment to Reduce Reliance on Fossil Fuels, Resulting in a Surge in the Adoption of Electric VehiclesThe vehicle-to-grid (V2G) market is witnessing unprecedented growth driven by a confluence of factors shaping the future of sustainable transportation and power management. Key drivers include the escalating demand for electricity, coupled with a global commitment to reduce reliance on fossil fuels, resulting in a surge in the adoption of electric vehicles (EVs). This market is characterized by opportunities that lie in the integration of renewable energy sources, such as solar and wind, to meet energy demands, while also addressing challenges associated with the variable nature of these sources.The primary driver for the V2G market is the escalating demand for electricity worldwide. Governments and industries are increasingly recognizing the need for sustainable and low-emission solutions, driving the widespread adoption of EVs. The electrification of the transportation sector not only addresses environmental concerns but also provides a unique opportunity for EVs to serve as mobile energy storage units. This bidirectional flow of power, where EVs can both draw and supply energy to the grid, is a key driver propelling the V2G market forward.Opportunities in the V2G market are abundant, particularly in the integration of renewable energy sources. As countries strive to meet ambitious renewable energy targets, V2G technology becomes an enabler for managing the intermittent nature of solar and wind power. This creates opportunities for smart grid solutions and advanced energy storage systems. Additionally, the idle times of parked EVs present an untapped opportunity for bidirectional ...Full story available on Benzinga.com
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