Mint Quick Edit | Tesla shareholders approved a conditional $1 trillion package for Elon Musk—Now comes the hard part

2 months ago 4

ARTICLE AD BOX

Musk had hinted at giving up his position if his stake wasn’t raised and the shareholders seem to have relented. (AFP)

Summary

The pay package Tesla's board approved for CEO Elon Musk is staggering. However, Musk has his work cut out. Tough competition from Chinese players, steep targets and his own underwhelming performance lately stack the odds unfavourably. The money will roll in only if he delivers.

One associates trillion dollar figures with economies, maybe even companies. So when Tesla’s shareholders approved additional shares worth potentially $1 trillion as pay for CEO Elon Musk over a decade, it made jaws drop.

Multiple milestones have been set as conditions for the pay, including for Tesla to deliver 20 million cars and 1 million each of robotaxis and robots. Also, Tesla’s market valuation must climb to $8.5 trillion from about $1.4 trillion.

Musk had hinted at giving up his position if his stake wasn’t raised and the shareholders seem to have relented, perhaps to prevent any loss in market value from such an eventuality. But big as the package may be, if the company’s valuation goes up as aimed, all shareholders would benefit, not just Musk.

That said, his record lately has been underwhelming, partly due to his political dabblings, which he has now withdrawn from. Also, Chinese competitors are throwing a strong challenge, even as AI innovation from the country is matching American technology step-for-step.

The going won’t be easy. But then if 75% of Tesla’s shareholders who approved the package think Musk can deliver, why should anybody complain.

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.