Daily Management Review

Tesla deprives Elon Musk of salary


01/24/2018


Tesla introduced a new compensation system for the founder and general director of the company Elon Musk. The statement stipulates that he will not receive guaranteed payments for his work. He can count on the reward only if the financial performance of the company will match the planned. This is reported in a press release of the company.



OnInnovation via flickr
OnInnovation via flickr
"Elon [Musk] will not receive any guaranteed compensation - neither salary, nor cash bonuses, nor shares that are provided during the work," the report says.

The new system is designed for 10 years. The remuneration is divided into 12 tranches, each of which will consist of an option for 1% of the outstanding shares of Tesla.

 To receive the first tranche, Musk should increase Tesla's capitalization to $ 100 billion (now $ 59 billion). In the future, the businessman will receive the next tranche each time the company's capitalization increases by $ 50 billion. Thus, Mask will be able to receive all 12 tranches only if Tesla's market capitalization reaches $ 650 billion.

In addition to the growth in capitalization, Tesla will have to regularly improve its revenue and EBITDA.

Such a system of remuneration guarantees that Musk will continue to lead the company in the long term, it follows from the report. Tesla does not rule out that in the future the post of CEO may be taken by another person who will report to Musk. Now no other candidates are considered for this position, the company said.

 The new remuneration system will come into full force if shareholders vote for it, the report says. The founder of the company and his brother Kimbal Musk will not participate in the voting.

Musk took 80th place in the Forbes ranking of the richest people in the world. His condition was estimated at $ 13.9 billion.

Despite these ambitious plans, Tesla is still not bringing any profit and will not begin to do it in the near future. In November 2017, the media circled the joke of the famous financial analyst Frank Schwope from the German bank Nord/LB. "You have to ask yourself what will happen before: Elon Musk will fly to Mars with SpaceX, or he will finally manage Tesla profitably." The analyst doubts that the company will implement its plans to sell 500 thousand cars in 2018. Like other experts, Schwope expects Tesla to yield no earlier than 2020.

The colonization of Mars, indeed, can begin earlier. In September, Elon Musk announced that his company SpaceX began focusing efforts on building a large cargo interplanetary ship Interplanetary Transport System (ITS). This is supposed to be subsidized by revenues from the launch of satellites and maintenance of space stations. The ITS must be 100% recyclable. Mask believes that the first ships of this type can sit on Mars as early as 2022.

source: nytimes.com






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