Elon Musk, CEO of Tesla, has been granted 12 payouts worth $700 million. This is because of Elon Musk's recent performance for the Tesla company. Elon Musk has been consistently achieving Tesla's goals and his performance has rewarded him tremendously by Tesla.
Elon Musk gained more than a million's, inching to two million, worth of Tesla shares. This is in accordance with a Tesla document. The Tesla shares amount to $775 million in the stock price of the company.
How does Elon Musk do it?
According to Engadget, Elon Musk does not receive salaries from Tesla. He does, however, hold 18.5% ownership of the company. For Elon Musk to be able to obtain payouts from Tesla, he must be able to achieve the goals set out by Tesla for him.
The goals Elon Musk must accomplish are set up like milestones. Once Musk reaches a certain milestone, he is then rewarded through a payout for his performance on that specific milestone.
For his first goal (or milestone), Elon Musk was able to maintain Tesla's market at a consistent $100 billion. This is all in capital and not including the expenses of the Tesla company.
Moreover, Elon Musk maintained Tesla's market at $100 billion for the 30-day and 6-month average. Additionally, Musk was able to achieve a quarterly revenue of $20 billion.
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Tesla's decision
In 2018, the shareholders of Tesla had approved of this compensation plan for the executive officers of Tesla. The Tesla company has written in its official documents that the compensation plans that are being used now by Tesla mirror the startup basis of the company. These compensation plans will be evaluated as Tesla sees fit and if ever modifications will be established on the compensation plans.
Tesla also believes that the payouts and compensation programs laid out for Tesla's executive officers motivates and encourages the executive officers to accomplish the goals of the company. In addition to this, these compensation programs will publicly show Tesla's success because of the high-rate of payout compensation for Tesla's executive officers.
Tesla has been diligent in the precise organization and structuring of the compensation programs for the executive officers. This is so that Tesla's executive officers will be rewarded and compensated well for their individual performances on the goals of the company. One of Tesla's shareholders, Richard Tornetta, however, is not too happy about Tesla's compensation programs for the company's executive officers.
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Legal action
Tornetta has taken legal action against the Tesla company because of the compensation programs for the company's executive officers. He stated that the company's board of directors have overly compensated Tesla's CEO Elon Musk by authorizing a package to the Tesla CEO.
According to a Reuters article, in September 2019, the judge in charge of this case declared that Tesla must defend and state the reason as to why Tesla's CEO, Elon Musk, was overly compensated by a pay package approved by Tesla itself. The package consisted of $2.6 billion and was sent out to Elon Musk back in 2018.
