Elon Musk Will Receive $1.6 Billion Once Tesla Raises Production to 300K a Year

Elon Musk does not have a massive salary and the CEO refuses it anyway, but he is set to receive an important sum of money from his stock options tied to Tesla achievements.
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Photo: Michelle Andonian for Flickr user OnInnovation
Tesla Motors awarded Musk with 5.27 million options tied to milestones, and Elon has already completed over 50% of them. The challenge began in 2012, and its time limit is in 2022.

Until then, Musk must ensure that Tesla production is raised to 300,000 units a year, and that the Model 3 is launched on the market and delivered to customers.

Another significant goal that Tesla must achieve for Musk to receive compensation is to boost the company’s value by another 28%. Tesla must also maintain a 30 percent profit margin for four quarters, in the context of the 300,000-unit yearly production requirement.

The goals have been strategically linked to both Tesla production and company value, to ensure that the firm will be profitable over the years and that its CEO will be appropriately rewarded.

According to Automotive News, Elon Musk has achieved seven targets related to the growth of Tesla’s market capitalization, but only five of ten operational goals have been reached. The 2012 stock plan made by Tesla Motors allows Musk to earn 1/10 of the options for every pair of goals achieved, which enabled the CEO to receive half of his total options so far.

Elon Musk has never accepted his CEO salary from Tesla in the last ten years, so these stocks will be a nice reward once the automaker becomes what the South African-born businessman dreamed it to be.

Once Tesla Motors reaches all the milestones described above, Elon Musk will be rewarded with a total of $1.6 billion. Initially, he was expected to get this sum in 2022, but analysts estimate he will receive the compensation earlier.

However, it has not been a smooth sail for Musk and Tesla, as the company has faced delays delivering the Model X, and the new Model 3 has an unprecedented number of reservations signed in record time, which the company must strive to build on time.
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About the author: Sebastian Toma
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Sebastian's love for cars began at a young age. Little did he know that a career would emerge from this passion (and that it would not, sadly, involve being a professional racecar driver). In over fourteen years, he got behind the wheel of several hundred vehicles and in the offices of the most important car publications in his homeland.
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