Musk gets big pay package, but only if Tesla hits lofty goals

PALO ALTO, CALIF. — Elon Musk will remain at Tesla Inc. under a 10-year, all-or-nothing pay package that demands massive growth.

The agreement, revealed Tuesday in a regulatory filing, requires that Tesla grow in $50 billion leaps, to a staggering $650 billion market capitalization.

To put those demands in perspective, the electric car maker, based in Palo Alto, California, is worth less than $60 billion today. Tesla must hit a series of escalating revenue and adjusted profit targets, only after which Musk would vest stock options worth 1 percent of company shares. He would get no other guaranteed compensation including salary, bonuses or equity “that vests simply by the passage of time,” Tesla said.

The pay still needs the approval of Tesla shareholders, who will vote on it at a special meeting in late March. Elon and Kimbal Musk, Elon’s brother, will recuse themselves from the vote.

If the goals are reached, Tesla would be one of the biggest companies in America, and Musk’s wealth would grow exponentially. The $650 billion benchmark would make Tesla the fourth-most valuable U.S. company, behind only Apple Inc., Alphabet Inc. and Amazon.com Inc. based on current valuations. It would be larger than Microsoft Corp., and would exceed the current combined valuation of the world’s top eight publicly traded auto companies.

Tesla’s plan for those goals was laid out in 2016 in a document Musk called “Master Plan, Part Deux.” Tesla will expand from electric cars and SUVs to trucks — including a semi tractor-trailer due out in 2019 — and buses. It will keep working on autonomous vehicle technology and plans to enter car-sharing, letting owners share their cars when they’re not using them and running Tesla-owned fleets in cities. The firm bought solar panel maker SolarCity Corp. in 2016 and plans to expand its solar panel and energy storage businesses.