The $1 trillion pay package for CEO Elon Musk that Tesla shareholders approved on Nov. 6—the world’s first—was labeled by the board as an exemplar of pay for performance. And at first glance, the program appears to fit that description in a big way: The hurdles it establishes for Musk to receive any compensation at all, let alone achieve the maximum 13-digit payout, appear the ultimate in stretch goals. Skeptical observers might wonder: “How could anyone be motivated by targets this seemingly unachievable?”
On the other hand, Tesla loyalists and the three-quarters of Wall Street analysts issuing either a “buy” or “hold” on the EV maker praise the arrangement’s similarity to one from 2018 that spurred Musk to work wonders—at least in boosting the share price. Now, they’re positing: “Elon’s already done it once. Now he’ll be super-motivated to stay in the job and conjure a second miracle. And if that happens, stockholders will pocket another king’s ransom.” Musk concurs.
