MSNBC has reported that Tesla shareholders overwhelmingly approved a massive new pay package for CEO Elon Musk. The deal is worth up to $1 trillion over 10 years if the company meets a list of benchmarks.
The deal was not without opposition, but ultimately Musk, already Tesla’s largest shareholder, could consolidate influence because the package would give him shares worth up to another 12% of the company. Tesla’s market capitalization would have to rise to at least $8.5 trillion and meet 12 operational milestones.
For the record, some of his current shares include his reward from a 2018 pay package that is still in dispute in a lawsuit pending before the Delaware Supreme Court.
Among the milestones Tesla would have to meet are the delivery of 20 million Tesla vehicles; 10 million active subscriptions for the add-on Full Self-Driving assistance; 1 million humanoid robots delivered; 1 million robotaxis in commercial operation; and eight additional milestones for profitability.
The agreement also requires him to “develop a framework” for the eventual succession of a new CEO which does not include a timeline. However, Musk would need to remain Tesla CEO for 7.5 years in order to vest in any shares from the new pay package.
So, the pay package extends to 10 years, while he has to remain CEO for 7.5 years to vest any new shares. Setting aside what feels like a pure vanity play for a very polarizing figure, lets see what history might tell us about the chances of reaching the goals.
Some history
The first EV proof of concept built on a Lotus platform was a complete failure and a new platform was built from the ground up.
The Model S began development in 2007 and manufacturing began at the Tesla Fremont Factory in June 2012. It was a major success and truly put the company and EVs on the map.
Deliveries of the Model X were planned in early 2014. However, deliveries did not begin until late September of 2015. Difficulties with the falcon-wing doors were the primary culprit. At least an 18 month delay, and a reasonable success.
The Model 3 was first discussed by Musk in 2012, anticipating an affordable $30,000 EV. The car was actually unveiled in 2016 and pricing began at $35,000, although most sales were for the more expensive longer-range version. The standard range was soon dropped, but sales remained otherwise strong.
The Model Y was first trademarked in 2013. Deliveries began in 2020. A long development time but another overall success for Tesla.
Musk first starting talking about the Cybertruck in 2012 with the first prototype shown in 2019. First deliveries began in November of 2023, 11 years later. In 2019, Elon Musk announced that the Cybertruck would launch in late 2021 with a starting price of $39,900 (the flat unpainted panels would make it cheaper to build). However, pricing never reached below $60,990 and most of those sold were dual motor versions that started at $79,990.
We recently discussed the idea that Musk sees production of the Cybercab beginning in early 2016, but there is simply no location on earth ready to accept a fully autonomous vehicle lacking any control mechanisms at all on its streets. He didn’t manage to fire all government regulators.
Upshot
So, while a $1 trillion pay package may be in the offing, history tells us that Musk’s promises have rarely been kept. Changes should always be anticipated, but pricing in particular have always been more hype than real and development delays are a constant.
It remains difficult to see who the customer is for the Cybercab or the robot for that matter. And truly feels like the polarizing Cybertruck is destined for history’s dustbin.
We will be truly surprised if all the milestones will be achieved, and it is more likely that he’ll be paid handsomely but the result will not be the world’s first actual trillionaire.
All of which helps avoid the conversation about whether or not one human should hold so much of the world’s wealth…
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The material on these pages is provided for information sharing purposes only and should not be used in lieu of an OEM service manual or factory authorized service procedure. We are not in the auto repair business, nor do we publish automotive service manuals. Nothing we include on these pages and posts has been reviewed, approved or authorized by any vehicle manufacturer.
Remember — only proper service and repair procedures will ensure the safe and reliable operation of your car. In addition, proper safety procedures and precautions, such as the use of safety goggles, the right tools and the equipment should be followed at all times to eliminate the possibility of personal injury or improper service which could damage the vehicle or compromise its safety.
Technology is always changing and what is current and accurate today may be literally out-of-date and inaccurate tomorrow. And when it comes to the current state of flux in the auto industry, nothing is more true.
The author has 30+ years of automotive experience and has assembled the most extensive collection of symbols and warning lights anywhere (over 1,000!) and can help you open and start any keyless start car with a dead key fob battery. BA, St. Joseph’s, ME: MS, RPI, NY
Tesla CEO gets his pay package
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MSNBC has reported that Tesla shareholders overwhelmingly approved a massive new pay package for CEO Elon Musk. The deal is worth up to $1 trillion over 10 years if the company meets a list of benchmarks.
The deal was not without opposition, but ultimately Musk, already Tesla’s largest shareholder, could consolidate influence because the package would give him shares worth up to another 12% of the company. Tesla’s market capitalization would have to rise to at least $8.5 trillion and meet 12 operational milestones.
For the record, some of his current shares include his reward from a 2018 pay package that is still in dispute in a lawsuit pending before the Delaware Supreme Court.
Among the milestones Tesla would have to meet are the delivery of 20 million Tesla vehicles; 10 million active subscriptions for the add-on Full Self-Driving assistance; 1 million humanoid robots delivered; 1 million robotaxis in commercial operation; and eight additional milestones for profitability.
The agreement also requires him to “develop a framework” for the eventual succession of a new CEO which does not include a timeline. However, Musk would need to remain Tesla CEO for 7.5 years in order to vest in any shares from the new pay package.
So, the pay package extends to 10 years, while he has to remain CEO for 7.5 years to vest any new shares. Setting aside what feels like a pure vanity play for a very polarizing figure, lets see what history might tell us about the chances of reaching the goals.
Some history
Upshot
So, while a $1 trillion pay package may be in the offing, history tells us that Musk’s promises have rarely been kept. Changes should always be anticipated, but pricing in particular have always been more hype than real and development delays are a constant.
It remains difficult to see who the customer is for the Cybercab or the robot for that matter. And truly feels like the polarizing Cybertruck is destined for history’s dustbin.
We will be truly surprised if all the milestones will be achieved, and it is more likely that he’ll be paid handsomely but the result will not be the world’s first actual trillionaire.
All of which helps avoid the conversation about whether or not one human should hold so much of the world’s wealth…
——————————————————————-
The material on these pages is provided for information sharing purposes only and should not be used in lieu of an OEM service manual or factory authorized service procedure. We are not in the auto repair business, nor do we publish automotive service manuals. Nothing we include on these pages and posts has been reviewed, approved or authorized by any vehicle manufacturer.
Remember — only proper service and repair procedures will ensure the safe and reliable operation of your car. In addition, proper safety procedures and precautions, such as the use of safety goggles, the right tools and the equipment should be followed at all times to eliminate the possibility of personal injury or improper service which could damage the vehicle or compromise its safety.
Technology is always changing and what is current and accurate today may be literally out-of-date and inaccurate tomorrow. And when it comes to the current state of flux in the auto industry, nothing is more true.
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The author has 30+ years of automotive experience and has assembled the most extensive collection of symbols and warning lights anywhere (over 1,000!) and can help you open and start any keyless start car with a dead key fob battery. BA, St. Joseph’s, ME: MS, RPI, NY