STREAMING NOW: Watch Now

Tesla won't pay Elon Musk unless ...

Elon Musk has a huge new incentive to make Tesla a bigger player in the car industry.Tesla said Tuesday that M...

Posted: Jan 23, 2018 2:39 PM
Updated: Jan 23, 2018 2:39 PM

Elon Musk has a huge new incentive to make Tesla a bigger player in the car industry.

Tesla said Tuesday that Musk won't get paid unless the company meets ambitious financial targets over the next decade.

The goal is for the electric car company to be worth $650 billion. Its current market value is just over $60 billion.

To put in perspective just how lofty a goal that is, consider that Apple, Google owner Alphabet and Microsoft are the only three American companies that have a market value over more than $650 billion.

Amazon, led by Jeff Bezos -- the world's wealthiest person -- is just a hair below that, with a market cap of about $649 billion.

If Tesla meets all its goals, which also include revenue and adjusted profit targets, Musk will receive stock worth $55.8 billion.

He'll get a chunk of stock every time Tesla hits another milestone for market value -- first at $100 billion, then every $50 billion more after that.

Until then, Musk will do without a salary, bonus or other annual stock awards from Tesla.

But he hardly needs a paycheck. Because of his ownership stake in Tesla, his investment in SpaceX and the money he made when PayPal, a company he backed, was sold to eBay, Musk is already worth more than $22 billion, according to Forbes and Bloomberg.

So can Tesla really grow to $650 billion and make Musk even richer?

Related: Tesla stock may be the new Big Short

Bulls argue that the mass-market Model 3 car will vault the company into the upper echelon of major car companies, alongside GM, Ford, Toyota and Volkswagen.

And Tesla stock has skyrocketed more than 920% in the past five years, including a 15% gain this year.

It's probably unreasonable to expect a repeat of that growth between now and 2023. But for the sake of argument, if Tesla's stock surged 920% more in the next five years, its market value would be just under $620 billion.

Tesla skeptics have pointed out that Musk has tended to be notoriously bad at meeting deadlines, which could give larger auto companies an advantage. After all, GM's Chevrolet Bolt and Nissan's Leaf are "cheaper" electric car options.

Some analysts also worry that Tesla is spreading itself too thin. It owns SolarCity, a solar panel company co-founded by two of Musk's cousins that is developing the Powerwall battery for the home.

So Tesla is trying to disrupt the auto market and the electric grid at the same time. All while he juggles SpaceX, The Boring Company and the artificial intelligence research firm OpenAI.

Related: Should Elon Musk merge Tesla and SpaceX?

Tesla seems to recognize the risk that Musk will be distracted. As part of the pay plan, Tesla said he must stay on as either CEO or executive chairman and chief product officer. That opens up the possibility that Tesla could one day hire a new CEO.

"This ensures that Elon will continue to lead Tesla's management over the long-term while also providing the flexibility to bring in another CEO who would report to Elon at some point in the future," Tesla said in a statement.

But Tesla added that "there is no current intention for this to happen."

Tesla has been a Wall Street darling, and there's a certain cult of personality among investors about Musk. So it may be a mistake to bet against him.

But even Musk has said several times in the past few years that he thought Tesla stock was overvalued based on current sales and the lack of consistent profits.

Then again, he's also claimed Tesla could be worth $700 billion by 2025.

Mississippi Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 113081

Reported Deaths: 3231
CountyConfirmedDeaths
Hinds7850176
DeSoto685779
Harrison505083
Jackson445084
Rankin388186
Madison377993
Lee350779
Forrest299578
Jones287784
Washington255199
Lafayette245943
Lauderdale2418134
Lamar221238
Bolivar200177
Oktibbeha199354
Neshoba1831111
Lowndes176362
Panola169038
Leflore165187
Sunflower159749
Warren153655
Monroe147372
Pontotoc145819
Marshall139227
Lincoln138557
Pike137756
Copiah136236
Coahoma124736
Scott124729
Grenada121138
Yazoo120733
Simpson120449
Union116525
Tate114939
Leake114340
Holmes114160
Pearl River112259
Itawamba112125
Adams106743
Prentiss103719
Wayne99821
Alcorn98112
George97718
Covington95326
Marion93542
Tippah88121
Newton85227
Chickasaw83626
Tallahatchie83025
Winston82821
Tishomingo80041
Hancock79827
Attala78926
Clarke73450
Clay68321
Jasper67717
Walthall63627
Calhoun61912
Noxubee59617
Smith58916
Montgomery53523
Claiborne53316
Tunica52817
Yalobusha51914
Lawrence50714
Perry48623
Carroll47612
Greene46918
Stone46214
Humphreys42616
Amite42113
Quitman4196
Jefferson Davis40011
Webster37013
Wilkinson33520
Benton3255
Kemper32015
Sharkey28014
Jefferson27410
Franklin2373
Choctaw2046
Issaquena1074
Unassigned00

Alabama Coronavirus Cases

Confirmed Cases: 154942

Reported Deaths: 2660
CountyConfirmedDeaths
Jefferson22861374
Mobile14468314
Tuscaloosa10148139
Montgomery9875196
Madison915094
Shelby720462
Lee649665
Baldwin647569
Marshall433049
Calhoun418960
Etowah418749
Morgan403635
Houston369232
DeKalb330229
Elmore314852
St. Clair287142
Limestone276530
Walker272293
Talladega261035
Cullman235724
Lauderdale214841
Jackson210015
Autauga202330
Franklin202131
Colbert196731
Russell19233
Blount189325
Dallas186227
Chilton184132
Escambia171929
Coffee171710
Covington169929
Dale165451
Chambers133643
Pike132313
Tallapoosa130587
Clarke130017
Marion106229
Butler100140
Barbour9979
Marengo99222
Winston91313
Geneva8527
Pickens82417
Lawrence82131
Randolph81216
Bibb81114
Hale74930
Clay72912
Cherokee72614
Lowndes70328
Monroe64010
Henry6396
Bullock63717
Washington63412
Crenshaw60230
Perry5836
Wilcox56212
Fayette56113
Conecuh55713
Cleburne5438
Macon52920
Sumter47021
Lamar4665
Choctaw38812
Greene34216
Coosa2023
Out of AL00
Unassigned00
Tupelo
Clear
68° wxIcon
Hi: 84° Lo: 55°
Feels Like: 68°
Columbus
Clear
65° wxIcon
Hi: 82° Lo: 61°
Feels Like: 65°
Oxford
Clear
66° wxIcon
Hi: 81° Lo: 49°
Feels Like: 66°
Starkville
Overcast
63° wxIcon
Hi: 81° Lo: 57°
Feels Like: 63°
WTVA Radar
WTVA Temperatures
WTVA Severe Weather