Elon Musk has spent $72 million on homes in California. His most recent mansion was more than $24 million. Time
Tesla has installed a new compensation plan for CEO Elon Musk that would reward him handsomely if he can build the electric vehicle automaker into "one of the most valuable companies in the world."
The plan — delivered with Tesla's characteristic rhetorical flair for bucking corporate conventions — would provide tens of billions in compensation to Musk if the company achieves its financial goals.
The company said Tuesday in a public filing that its board had authorized a plan that would deliver vested stock to Musk in increments as the company approaches $650 billion in market value and hits other financial milestones.
To reach that level, Tesla would need to increase its value about 11-fold from Tuesday morning's $59 billion.
At $650 billion, the company would be worth about double Walmart and more than Facebook but less than Apple and Google parent Alphabet.
The plan ties Musk's compensation 100% to the performance of the company. He won't receive any guaranteed pay, such as a salary, bonuses or stock that vests purely over time.
Instead, he'll get awarded shares by meeting a pair of benchmarks:
—Each time the company increases its market capitalization by $50 billion, beginning with the $100 billion mark and ending with the $650 billion level.
—Specific revenue and profit goals, beginning at $20 billion in sales and $1.5 billion in earnings before interest, taxes, depreciation and amortization (EBITDA) and topping out at $175 billion in revenue and $14 billion in EBITDA.
Musk would receive 1% of the company up to 12 times over the course of the next 10 years.
The plan is contingent upon Musk remaining CEO or becoming executive chairman and chief product officer.
More: We rented a Tesla Model 3 from a new owner: Call it spartan, high-tech and compelling
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More: Tesla producing far fewer Model 3s than Elon Musk promised, extending wait time
If the company met every benchmark and Musk never sold any shares, Tesla estimated he would own about $55.8 billion in stock under one scenario.
Tesla said Musk was recused from the board's vote authorizing the pay plan.
Musk is already worth more than $20 billion, according to Forbes. His pay has been almost exclusively performance-based since 2012. He collected a salary of $49,920 in 2017.
Tesla's stock rose 1.2% in pre-market trading Tuesday to $355.90.
The public filing included additional hints on how Tesla plans to grow. The company said it is aiming to deliver vehicles "to cover all major forms of terrestrial transport" and plans on "enabling sharing so that your car can make money for you when you aren’t using it."
Musk has already introduced an electric semi-truck and has suggested he could get more involved in hyperloop high-speed rail technology he helped spark interest in several years ago.
Tesla is also said to have been considering ride-sharing options for its vehicles that would allow owners to rent them out.
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.
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