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.

Cases: 259117

Reported Deaths: 5668
CountyCasesDeaths
DeSoto17436187
Hinds16524328
Harrison13876199
Rankin11000217
Jackson10652187
Lee8981141
Madison8413168
Jones6552112
Forrest6101121
Lauderdale6034189
Lowndes5463119
Lafayette507393
Lamar496465
Washington4877124
Bolivar4068109
Oktibbeha401681
Panola378380
Pontotoc372155
Monroe3628105
Warren3619101
Union350563
Marshall349569
Neshoba3433152
Pearl River3380104
Leflore3079108
Lincoln300687
Sunflower289272
Hancock285360
Tate276762
Alcorn268854
Pike266580
Itawamba266261
Scott253448
Yazoo250156
Prentiss249552
Tippah245850
Copiah244549
Coahoma243654
Simpson240069
Leake234367
Grenada221171
Marion218473
Covington216972
Adams210170
Wayne206432
Winston205267
George202739
Attala195761
Newton195745
Tishomingo192461
Chickasaw186144
Jasper176038
Holmes169868
Clay162735
Tallahatchie154935
Stone148424
Clarke143562
Calhoun138021
Smith125825
Yalobusha120234
Walthall113437
Greene112129
Noxubee111425
Montgomery110936
Carroll105922
Lawrence104317
Perry103231
Amite99926
Webster94324
Tunica87621
Jefferson Davis87327
Claiborne86825
Benton84023
Humphreys83624
Kemper79120
Quitman7029
Franklin68716
Choctaw62313
Wilkinson58825
Jefferson55920
Sharkey44217
Issaquena1606
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Alabama Coronavirus Cases

Cases: 432536

Reported Deaths: 6379
CountyCasesDeaths
Jefferson63523957
Mobile30967562
Madison27627201
Tuscaloosa21122268
Montgomery19495326
Shelby18941126
Baldwin16798188
Lee12901102
Morgan12447129
Etowah11911178
Calhoun11365205
Marshall10322119
Houston8813156
Limestone823176
Cullman8159106
Elmore8056104
DeKalb7796102
Lauderdale773399
St. Clair7705122
Talladega6347109
Walker5993174
Jackson590341
Colbert543274
Blount541186
Autauga527061
Coffee454160
Dale405482
Franklin371948
Russell345712
Chilton340972
Covington334168
Escambia328344
Dallas310196
Chambers297370
Clarke290536
Tallapoosa2665107
Pike258830
Marion250155
Lawrence249150
Winston231442
Bibb219848
Geneva206946
Marengo205229
Pickens198631
Hale180842
Barbour177836
Fayette174528
Butler171358
Cherokee162530
Henry157523
Monroe150718
Randolph143236
Washington139527
Clay128546
Crenshaw121644
Cleburne119724
Lamar119621
Macon119637
Lowndes112536
Wilcox105822
Bullock101428
Perry99118
Conecuh96320
Sumter89726
Greene76723
Coosa62215
Choctaw51624
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