Tesla shareholders have approved a USD1 trillion (~RM 4.18 trillion) compensation package for CEO Elon Musk. The approval was given after receiving 75% of shareholder approval in a vote held this week. That said, what should you know about it?
A compensation to ensure Elon’s continuity
For your information, this compensation is given to Musk as an incentive to ensure he remains Tesla CEO for another 10 years by achieving a number of set targets during that period. Tesla's board of directors proposed this reward package in September.
Additionally, the USD1 trillion (~RM 4.18 trillion) compensation is in the form of 12% of Tesla shares if he manages to increase the company's market value to USD8.6 trillion (~RM 35.95 trillion) within a decade. Tesla's market value is currently around USD1.1 trillion (~RM4.6 trillion). If Musk succeeds in achieving the target, he will hold almost 29% of the company's shares
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Other targets Musk needs to achieve include;
- Launching 1 million Cybercab self-drive taxis for commercial purposes.
- Releasing 1 million Optimus robots also for commercial purposes.
- Increase Tesla's profits to USD400 billion (~RM1.672 trillion) from USD17 billion (~RM71.06 billion) now.
- Reaching 20 million EV deliveries
During this 10-year period, Musk will not receive any salary or cash bonuses from the company. This substantial compensation offer will make Musk the first person to reach trillionaire status. He is currently the richest person in the world with a fortune of USD491 billion (~RM2.05 trillion), with his closest challenger Larry Ellison having “only” USD298 billion (~RM1.25 trillion).
Although this compensation offer is lucrative, it comes at a time when Tesla is facing various issues with several top executives leaving the company and their EVs in the global market are falling sharply due to increasingly fierce competition from other EV companies.
Stay tuned to TechNave.com for more updates.
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