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Tesla won't pay Elon Musk unless ...

Elon Musk has a huge new incentive to make Tesla a bigger player in the car industry.Tesla said Tuesday that M...

Posted: Jan 23, 2018 3:39 PM
Updated: Jan 23, 2018 3:39 PM

Elon Musk has a huge new incentive to make Tesla a bigger player in the car industry.

Tesla said Tuesday that Musk won't get paid unless the company meets ambitious financial targets over the next decade.

The goal is for the electric car company to be worth $650 billion. Its current market value is just over $60 billion.

To put in perspective just how lofty a goal that is, consider that Apple, Google owner Alphabet and Microsoft are the only three American companies that have a market value over more than $650 billion.

Amazon, led by Jeff Bezos -- the world's wealthiest person -- is just a hair below that, with a market cap of about $649 billion.

If Tesla meets all its goals, which also include revenue and adjusted profit targets, Musk will receive stock worth $55.8 billion.

He'll get a chunk of stock every time Tesla hits another milestone for market value -- first at $100 billion, then every $50 billion more after that.

Until then, Musk will do without a salary, bonus or other annual stock awards from Tesla.

But he hardly needs a paycheck. Because of his ownership stake in Tesla, his investment in SpaceX and the money he made when PayPal, a company he backed, was sold to eBay, Musk is already worth more than $22 billion, according to Forbes and Bloomberg.

So can Tesla really grow to $650 billion and make Musk even richer?

Related: Tesla stock may be the new Big Short

Bulls argue that the mass-market Model 3 car will vault the company into the upper echelon of major car companies, alongside GM, Ford, Toyota and Volkswagen.

And Tesla stock has skyrocketed more than 920% in the past five years, including a 15% gain this year.

It's probably unreasonable to expect a repeat of that growth between now and 2023. But for the sake of argument, if Tesla's stock surged 920% more in the next five years, its market value would be just under $620 billion.

Tesla skeptics have pointed out that Musk has tended to be notoriously bad at meeting deadlines, which could give larger auto companies an advantage. After all, GM's Chevrolet Bolt and Nissan's Leaf are "cheaper" electric car options.

Some analysts also worry that Tesla is spreading itself too thin. It owns SolarCity, a solar panel company co-founded by two of Musk's cousins that is developing the Powerwall battery for the home.

So Tesla is trying to disrupt the auto market and the electric grid at the same time. All while he juggles SpaceX, The Boring Company and the artificial intelligence research firm OpenAI.

Related: Should Elon Musk merge Tesla and SpaceX?

Tesla seems to recognize the risk that Musk will be distracted. As part of the pay plan, Tesla said he must stay on as either CEO or executive chairman and chief product officer. That opens up the possibility that Tesla could one day hire a new CEO.

"This ensures that Elon will continue to lead Tesla's management over the long-term while also providing the flexibility to bring in another CEO who would report to Elon at some point in the future," Tesla said in a statement.

But Tesla added that "there is no current intention for this to happen."

Tesla has been a Wall Street darling, and there's a certain cult of personality among investors about Musk. So it may be a mistake to bet against him.

But even Musk has said several times in the past few years that he thought Tesla stock was overvalued based on current sales and the lack of consistent profits.

Then again, he's also claimed Tesla could be worth $700 billion by 2025.

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 941120

Reported Deaths: 15315
CountyCasesDeaths
Marion1282511983
Lake633041097
Allen53609758
Hamilton43827447
St. Joseph41906590
Elkhart33545490
Vanderburgh30383448
Tippecanoe26820249
Johnson23609417
Hendricks22250341
Porter21737346
Clark17409229
Madison17366384
Vigo16108281
Monroe14466191
LaPorte14311239
Delaware14070221
Howard13865272
Kosciusko11418135
Hancock10841165
Warrick10674177
Bartholomew10542168
Floyd10430205
Wayne9959226
Grant9130204
Morgan8865160
Boone8389111
Dubois7710123
Dearborn762289
Henry7608130
Noble7413101
Marshall7362128
Cass7176117
Lawrence6957153
Shelby6584111
Jackson656785
Gibson6156107
Harrison603786
Huntington600195
Montgomery5805105
DeKalb574291
Knox5494104
Miami542488
Putnam536768
Clinton533665
Whitley524953
Steuben497268
Wabash483592
Jasper479160
Jefferson470092
Ripley454277
Adams444068
Daviess4169108
Scott405865
White391857
Clay390857
Greene388392
Decatur385296
Wells384983
Fayette374278
Posey359941
Jennings353156
Washington332047
LaGrange321375
Spencer317835
Fountain316555
Randolph312888
Sullivan307449
Owen283863
Starke280064
Fulton277553
Orange275859
Jay254837
Perry251652
Carroll243729
Franklin239338
Rush234130
Vermillion233250
Parke219820
Tipton209655
Pike207639
Blackford168334
Pulaski163551
Crawford146018
Newton144345
Benton142516
Brown135346
Martin128217
Switzerland125810
Warren114616
Union96911
Ohio79711
Unassigned0479

Ohio Coronavirus Cases

Data is updated nightly.

Cases: 1365800

Reported Deaths: 21596
CountyCasesDeaths
Franklin1522221560
Cuyahoga1344852327
Hamilton976051320
Montgomery670271141
Summit562091047
Lucas50900863
Butler47417655
Stark41580976
Lorain31567532
Warren30001331
Mahoning26963639
Clermont25628292
Lake24585417
Delaware22313145
Licking20487241
Fairfield20420221
Greene20309272
Trumbull19866509
Medina19796287
Clark17879328
Richland16314234
Portage16130229
Wood15681208
Allen14115256
Miami13786253
Muskingum12641152
Wayne11946238
Columbiana11708241
Tuscarawas10953269
Marion10725148
Pickaway10465129
Scioto10324127
Erie9747171
Ross9436176
Lawrence8755125
Hancock8458141
Ashtabula8317185
Geauga8173156
Belmont8140187
Jefferson7527172
Huron7423128
Union731851
Washington7183120
Athens697165
Sandusky6848134
Darke6756136
Knox6671122
Seneca6358137
Ashland5948113
Auglaize587188
Shelby5727101
Brown564171
Mercer557890
Defiance5483101
Madison543371
Crawford5425114
Highland541581
Fulton530683
Clinton525580
Logan512182
Preble4994110
Putnam4833106
Guernsey470364
Williams459282
Perry449852
Champaign445964
Ottawa436884
Jackson425362
Pike388843
Morrow383851
Fayette375853
Coshocton374766
Adams360675
Hardin359069
Gallia347356
Holmes3259108
Henry324668
Van Wert314670
Hocking301769
Wyandot280658
Carroll262652
Paulding242243
Meigs213942
Monroe189749
Noble169340
Morgan165829
Harrison157940
Vinton138118
Unassigned05
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