Can Tesla Become A Trillion-Dollar Company? Will Musk Get His Payday?

Tesla

FEB 6 2018 BY EVANNEX 25

Tesla

Tesla CEO Elon Musk (Instagram: true_gentlemans)

ELON MUSK: TESLA CAN BE A TRILLION-DOLLAR COMPANY

With much fanfare this week, Tesla revealed their new pay package for the company’s CEO, Elon Musk. The New York Times reported, “Mr. Musk’s new compensation plan… is perhaps the most radical in corporate history: Mr. Musk will be paid only if he reaches a series of jaw-dropping milestones based on the company’s market value and operations. Otherwise, he will be paid nothing.”

It’s a comprehensive decade-long plan, but in a nutshell: “Tesla has set a dozen targets, each $50 billion more than the next, starting at $100 billion, then $150 billion, then $200 billion and so on, all the way to a market value of $650 billion… a figure many experts would contend is laughably impossible and would make Tesla one of the five largest companies in the United States, based on current valuations — his stock award could be worth as much as $55 billion.”

*This article comes to us courtesy of EVANNEX (which also makes aftermarket Tesla accessories). Authored by Matt Pressman.

Tesla

A look at Elon Musk’s Tesla compensation plan (Image: Tesla)

Can he do it? Based on his track record, it’s certainly possible. It turns out, “Mr. Musk’s new compensation plan is similar to the previous one put in place when the company was worth $3.2 billion in 2012. Only now, the numbers are much larger. That package also paid Mr. Musk only when he reached certain market value and operational benchmarks. And virtually nobody could imagine Tesla would be worth 17 times what it was back then. Mr. Musk has reached all but one of the metrics in that plan.”

Above: New York Times writer Andrew Ross Sorkin discusses Tesla’s new compensation plan for Elon Musk (Youtube: CNBC)

What’s shocking about this new plan is the amount of skin in the game Musk is willing to take on in order to see the company thrive. It’s reported that “The way the arrangement is structured, each milestone is a blunt instrument: He either reaches it or gets nothing.” Musk explains to the New York Times, “If all that happens over the next 10 years is that Tesla’s value grows by 80 or 90 percent, then my amount of compensation would be zero.”

Tesla

Key highlights from Elon Musk’s Master Plan “Part Deux” (Image: Visual Capitalist)

That said, with Musk’s latest master plan firmly in place, he sees a clear path to reach these ultra-aggressive targets. When asked if he thinks Tesla can achieve the milestones, Musk responds, “I actually see the potential for Tesla to become a trillion-dollar company within a 10-year period.”

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Source: The New York Times 

*Editor’s Note: EVANNEX, which also sells aftermarket gear for Teslas, has kindly allowed us to share some of its content with our readers. Our thanks go out to EVANNEX, Check out the site here.

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25 Comments on "Can Tesla Become A Trillion-Dollar Company? Will Musk Get His Payday?"

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Brian
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Brian

So… his job is not to make the company successful, nor to achieve its mission. Rather his job is to pump the stocks to achieve some arbitrary value. Great.

Nick
Guest
Nick

Even worse, he has to do both!

Operational and stock performance targets are included.

Someone out there
Guest
Someone out there

No

Brave Lil' Toaster
Guest
Brave Lil' Toaster

The funny part is that you even care.

HVACman
Guest
HVACman

Tesla has had it easy so far. The future products and markets in the master plan will have significant competition. Many are already far ahead of Tesla (EV buses, specific-duty trucks, self driving, AV).

Clean Technica identified 43 battery storage companies to watch. LG, Samsung, Bosch all can build everything mass-storage-wise TSLA is building.

Solar panels for the masses are not a high-profit venture and architectural roof shingle-panels will be a high-end/low volume luxury item.

I’m not seeing a compelling $1 trillion company.

Tim Kulogo
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Tim Kulogo

Still seems a lot more likely than starting a new all electric major car manufacturer did 15 years ago.

Pushmi-Pullyu
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Pushmi-Pullyu

“Tesla has had it easy so far.”

Succeeding despite the overwhelming consensus of analysts being, for years, that Tesla would fail, and at one point Elon having to bet his entire personal fortune to keep the company afloat, and coming within a week of Elon deciding to sell off the company…

This is a use of the term “easy” with which I am not familiar.

Tesla’s early years were anything but “easy”. Details can be found in the tell-all article “Tesla’s Wild Ride”:

https://finance.yahoo.com/news/tesla-apos-wild-ride-174539166.html

Go Tesla!

Six Electrics
Guest
Six Electrics

It’s possible for Tesla to both “have it easy” and, simultaneously, for Tesla to make it look hard by sheer incompetence. We’re it not for having it easy, Tesla would have long since perished.

Nick
Guest
Nick

?

Gasbag
Guest
Gasbag

Were it not for the incumbent’s incompetence and lack of vision Tesla would have perished long ago.

Missing the M3 ramp up by 6-12 months will not be fatal owing to the incompetence of the competition.

Recoil
Guest
Recoil

Coming from someone so incompetent as you that would be high praise as you couldn’t make money on a lemonade stand in the Sahara. How much did you lose again shorting Tesla? What percentage of that Billion the shorters have lost this year alone was yours?

arne-nl
Guest
arne-nl

Building a car company from scratch and, going it alone, building it out in a matter of only 10 years to threaten the mighty car industry with billions and billions in their war chest…

The risk was inevitable, and so there were some screw-ups along the way. No guts no glory.

But by calling those failures ‘incompetence’, you’ve launched your level of denial right into the Van Allen belts.

Someone out there
Guest
Someone out there

Depends on you definition of “succeeding”. I wouldn’t really call it success when you lose several billions per year. It’s easy spending other people’s money. Making your own money is the tricky part.

koz
Guest
koz

As long as the other companies exhibit the same risk aversion that has allowed Tesla to get where they are and still have as little “real” competition as they currently have then you’re “concerns” are overly stated.

The other major car companies will be in huge trouble if autonomous vehicles come to pass. Many of them will not survive the reduction in market that will bring. The better be ready to spin off dying albatrosses in a hurry in order to end up with a surviving entity but even then they still have tremendous pension commitments that they probably won’t be able to get around.

G2
Guest
G2

Concur.

Mister G
Guest
Mister G

They will survive when tesla buys them or subcontracts manufacturing of tesla vehicles

Will
Guest
Will

You mean a company that regreass with autopilot and autonomous program compare to GM . Pshhh

Another Euro point of view
Guest
Another Euro point of view

No.

Will
Guest
Will

I dont see it happening

G2
Guest
G2

Only the *wise* bet against Musk in the early days. Only fools would bet against him now.

Nix
Guest
Nix

Keep in mind that this is a NASDAQ traded public corporation. The bean counters who provided the numbers to the Compensation Committee had to do their due diligence, and the board’s Compensation Committee is legally duty bound to create a compensation package that meets their fiduciary duties to stockholders. And Musk’s legal representative who negotiated the agreement also would have had a duty to fully represent Musk’s best interests.

All of these people have FULL inside information on ALL company finances and future product lines. These numbers are the closest any of us will ever get to having direct insights into insider information.

And history has already shown that Elon is entirely capable of meeting targets set for him in the past, even while pundits said they were all impossible and Tesla would shut their doors before Elon hit a single target and he would get nothing.

_______________________________________-

So we’ve got a combination of KNOWN insider information, combined with a track record of hitting milestones pundits said were impossible.

Bet against these targets based upon best available insider information at your own peril. These represent tough but attainable targets.

Nick
Guest
Nick

Your are all missing the point –
this has been done to show hes there for the long term and committed- he not interested in personnel gain what so ever…dont think he cares if he misses the targets he is not trying to make a pile of cash for himself- and the ‘pundits’ and markets just dont understand the concept…

Mister G
Guest
Mister G

CONGRATULATIONS ELON WORKED SO HARD FORGOT HOW TO VACATION YOU MADE IT

Mister G
Guest
Mister G

FALCON HEAVY WAS A SUCCESS ELON IS MAGA LOL and President Tweet only brings america shame and embarrassment oh and a military parade LOL

Goaterguy
Guest
Goaterguy

Funny how people care about this and his money when he is likely planning on when he is getting to Mars.