“Tesla shareholders passed a positive decision on a potential bonus for CEO Elon Musk, which could make him the first trillionaire in the world.”, — write: www.pravda.com.ua
Elon Musk, photo: Getty Images Source: CNNBBC
Details: Shareholders approved Tesla CEO Musk’s record bonus package, which could reach nearly $1 trillion.
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75% of the present shareholders supported the idea of a record incentive to the richest man in the world in case of fulfillment of the set business goals. The vote did not include the 15% of the company’s shares already owned by Musk.
When the results were announced, those present at the meeting burst into applause and chants. Musk soon thanked Tesla’s shareholders and board of directors. “I am very grateful,” he said.
Musk does not receive a salary, but the approved compensation package takes the form of a stock grant that will give him an additional 423.7 million Tesla shares over the next 10 years.
Those shares could be worth about $1 trillion if the company reaches the $8.5 trillion market cap needed for Musk to receive the full potential reward. In addition, Tesla must meet a number of operational or financial goals for it to receive the full number of shares, which will be divided into 12 equal blocks.
Receiving all the shares available in that package over the next 10 years is equivalent to earning $275 million a day, far more than any other executive compensation package in history.
For Tesla to reach the required market value of $8.5 trillion, the stock would need to jump 466% from today’s price. It’s also about 70% higher than the world’s most valuable company, Nvidia, which hit a record $5 trillion market cap last week.
According to Bloomberg, Musk is already worth $473 billion, largely thanks to his stake in Tesla, as well as other companies he controls, including SpaceX and xAI.
A vote to reject the compensation package on Thursday could have meant his departure as Tesla CEO. Tesla’s board of directors said in an official statement that Musk had raised the possibility of leaving the company if he did not receive the guarantees of control that his compensation package could provide.
However, the company experienced a difficult year. Sales and profits fell in the first half of the year, and Tesla could lose billions in revenue due to cuts in government support for electric cars in the US.
But Musk and Tesla executives dismiss those concerns, saying Tesla is shifting its focus from simply selling electric cars to selling self-driving cars, including a fleet of “robotaxis” as well as humanoid robots.
In his address to shareholders, Musk talked more about robots that have not yet gone on sale than about the company’s cars. Most of his references to cars were about so-called Full Autopilot (FSD), a driver-assistance feature that still requires drivers to be alert and in control of the car.
CNN notes that most of Musk’s promised products and concepts are still in the development stage and have not gone on sale. This means that even after the bonus package is approved, there is no certainty that Musk will ever receive any of the potential hundreds of millions of shares. He will have to solve the current problems of the company and then fulfill the big promises he made for the future.
Musk insists that he needs the additional shares to have more control over the company, not because he wants to get even richer.