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Tesla’s Pay Deal to Keep Elon Musk: All or Nothing

55 points| endswapper | 8 years ago |nytimes.com | reply

15 comments

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[+] afinlayson|8 years ago|reply
He really needs to find a COO. He needs his Tim Cook. This is a good way to show shareholders he's all in, but he's not a genius at Operations, he needs to find someone who is.
[+] loceng|8 years ago|reply
He'll learn if that's a role he's meant to evolve into.
[+] Robotbeat|8 years ago|reply
Not a bad idea. Elon Musk has Gwynne Shotwell as president at SpaceX and has been really effective at focusing SpaceX on effectively focusing and executing on Falcon 9.

SpaceX effectively has two strong leaders, not just Musk. Musk would be lucky to strike gold twice and find another leader as great (and as complementary) as Gwynne to help run Tesla.

[+] sytelus|8 years ago|reply
Fun bit: Mr. Musk does not take a salary, although under California State law, Tesla is required to pay him at least minimum wage. Tesla sends him checks that pay him a little more than $37,000 annually.

A first minimum wage CEO of a public company?

[+] craftyguy|8 years ago|reply
Salary does not reflect total compensation. Even the infamous "$1 salary CEOs" still take home millions in options, bonuses, and other perks.
[+] secabeen|8 years ago|reply
No, there are lots of CEOs that only take $1 salary, in states where they can be exempt from minimum wage.
[+] voidmain|8 years ago|reply
This plan is roughly isomorphic to option compensation. It has a serious incentive compatibility problem: the value of the options increases with volatility/risk, so incentivizes unnecessary, and even negative expectation, risk taking. Maybe Musk has a big enough stake in Tesla to mitigate this effect, but it's definitely not a risk free approach for minority shareholders.
[+] Robotbeat|8 years ago|reply
It's also linked to operational milestones, so market cap has to be met with actual progress. That's much better than market cap alone.