ã€Global Internet Reports】 Tesla announced today that it has created a new 10-year performance reward plan for CEO Elon Musk. The plan declared: "Either let Musk be rich or let him work without compensation." It is understood that in the 10 years, Musk will not receive any basic salary or bonus, his salary will only be in accordance with the company's market value and operations Performance payment.
Tesla set a target of 12 market capitalizations, each of which is worth 50 billion U.S. dollars more than the previous one, starting at 100 billion U.S. dollars. Tesla also set 12 revenue and adjusted profit targets. Only at the same time reached these two goals, Musk can get 168 million shares, that is, the company's 1% stake.
Tesla said that Musk will not receive any salary or bonus guarantees, and the ownership of the options will not be based solely on his tenure. Tesla said that this is a high-risk stock award program. Tesla pays compensation only when Marsk achieves both market value and operating performance.
In addition to the market value indicator, Musk also needed to lead Tesla to achieve a series of improved revenues and adjusted EBITDA (earnings before depreciation and amortization).
If Tesla can raise the market value to 650 billion U.S. dollars, then Musk’s share price will be as high as 55 billion U.S. dollars (assuming Tesla does not issue any new shares for the next 10 years). Even if it reaches a lower goal, Musk can get billions of dollars in compensation.
And Musk also claimed to CNBC: "I saw Tesla becoming the potential of a trillion-dollar company within ten years."
Many critics believe that Musk's new compensation plan is just a publicity gimmick. Tesla is still at a loss. According to Bloomberg News, last year Tesla’s loss reached 500,000 U.S. dollars per hour. The famous short seller Jim Chanos believes that Tesla's stock is worthless.
Tesla said that Musk, 46, must continue as CEO of the company or as executive chairman and chief product officer. This is to ensure that he continues to lead Tesla's management for a long period of time and at the same time create flexibility to introduce another CEO who reports to him at some point in the future.
Tesla stated that Musk’s previous compensation was also paid in accordance with company performance. This performance incentive plan was established in 2012 and is linked to Tesla’s share price performance and auto R&D progress.
According to the Forbes Rich List, Musk’s worth has exceeded $20 billion, and his salary is almost completely linked to performance. This also explains why he only got $49,920 in salary in 2017. Investors like Tesla, but the company has been unable to turn a profit, and is currently facing serious production problems.
Earlier this month, the company announced that its production target for the new Model 3 sedan aimed at the mass market has been lowered to 2,500 units before the end of March 2018, which is half of the mass production target previously set.
As of Monday's close, Tesla had a market value of $59.1 billion.
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