After setting all kinds of new trends as an eccentric CEO, Elon Musk is taking on a new battle of his own. Under a new compensation agreement, Musk will receive no regular pay beyond the equivalent of a full-time, minimum wage employee in the state of California. All additional compensation will be based on company performance over the coming years.
Tesla must reach a market value of at least $650 billion within the next decade for Musk to cash in on all of the available options. This would place Tesla as one of the top five most valuable businesses globally. Musk must remain as the acting CEO of Tesla or become executive chairman and chief product officer for the deal to remain valid. It is possible that a new CEO could be brought in and report directly to Musk.
Currently, Tesla is approaching a $60 billion market cap. Musk will receive his first stock options once Tesla reaches $100 billion and vest more for every $50 billion in additional value that Tesla gains. In the end, Musk is able to earn up to 1.69 million shares of stock worth up to $55 billion. Should Tesla fall short on goals, total compensation could be just $37,000 annually in standard wages required by state law.
Considering that Elon Musk is already a billionaire, the compensation is not the only reason keeping him involved in so many projects. From SpaceX and Hyperloop to The Boring Company, there are plenty of other projects to keep the entrepreneur busy. Perhaps one of the reasons for Musk's desire to amass more capital is to help fund additional space travel efforts.