Tesla Inc (NASDAQ:TSLA) is making sure that founder and CEO Elon Musk will stick around.
A new performance award for Elon Musk will require him to meet certain goals over a 10-year period to receive pay. The company notes that this system is based on a similar performance award for the CEO that started back in 2012.
The performance award for Elon Musk will require Tesla Inc to reach certain goals before he can receive his pay, which is sitting in the form of vesting stock. The first goal that Musk must achieve is increasing the company’s market cap to $100 billion, which is roughly double its current value.
Following this first milestone, Elon Musk will be able to receive 11 more tranches of vested stock for each additional $50 billion that is added to Tesla Inc’s market cap. This means that Musk must bring TSLA’s market cap to $650 billion over the next 10 years to get all of the vesting stock. Each of the tranches represents 1% of current TSLA stock.
Outside of the market cap milestones, there is another set of milestones that Tesla Inc will have to reach for Elon Musk to receive his vested stock. These are operational milestones. The company notes that these milestones are in relation to its revenue and Adjusted EBITDA targets. The company says these milestones are in place to ensure that it performing well on a top-line and bottom-line basis as its market cap increases.
TSLA stock was up slightly as of Tuesday afternoon.
As of this writing, William White did not hold a position in any of the aforementioned securities.
