Elon Musk briefly lost the crown of world’s richest man to Larry Ellison. His consolation prize comes in the form of a Tesla pay package that would make the distinction almost irrelevant.
Tesla’s board has proposed to award Musk up to $1 trillion (€853 billion) in stock if it hits multiple milestones over the next decade.
That’s some reward, given Musk’s behaviour. Far-right tweeting that has tarnished Tesla’s brand, juggling multiple jobs, threatening to quit unless he receives more stock – some might be tempted to say Tesla’s greatest risk may not be losing Musk, but keeping him.
Still, the board’s calculation is stark: Tesla’s sky-high valuation is inseparable from investors’ belief in Musk. Without him, the stock price would surely sink. Hence, shares rose following the announcement.
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Money aside, the package underscores Musk’s desire for control. He seeks a 25 per cent voting stake; the financial windfall is arguably incidental. After all, even without new awards, his current holdings would make him a trillionaire if Tesla achieves its goals, which include profits soaring to $400 billion and the share price rising eightfold.
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Still, there are obvious hazards. Rewarding one person so lavishly concentrates power, encourages excessive risk-taking and financial engineering, and tests governance norms.
Tesla shareholders will prosper if Musk somehow delivers, but they remain perilously tied to one man, and all the baggage that comes with him.
