Tesla is rallying after shareholders approve Elon Musk's compensation (TSLA)

  • Tesla is rallying after shareholders approve Elon Musk's compensation (TSLA)

Tesla is rallying after shareholders approve Elon Musk's compensation (TSLA)

The awards are based on projections that Tesla will rise from a market value of $650 billion from $55 billion during that timeframe. If Musk is successful, Tesla's investors might feel the effects of both. The Silicon Valley company has been facing pressure on multiple fronts, from a cash crunch and production delays to increasing competition from rivals, as well as growing concern that Musk is distracted by too many projects. The board needs support from investors holding a majority of the shares - not counting those owned by Musk and his brother Kimbal, who's a Tesla director - to make the award.

The vote was contentious, with a proxy advisory firm opposing the package and large institutional investors supporting it.

Tech entrepreneur Elon Musk has flatly denied "Globes" report that his visit to Israel this week is connected to collaboration between his electric vehicle company Tesla and Tel Aviv-based startup Cortica.

Musk would get the maximum payout only if he manages to deliver on Tesla's eye-popping growth projections and drive Tesla's market value to $650 billion - just short of the current value of Microsoft, the second-most-valuable company next to Apple. The company is now valued at $54.6bn.

In order to receive the highest award, Tesla would have to be worth more than 12 times as much as General Motors, the US's largest auto manufacturer, is today ($52.9bn). Large stock awards can be costly for investors in two ways: They can increase a company's expenses and they dilute the stakes of existing shareholders. The new grant outlines an aspiration of making Tesla one of the world's biggest companies but without any clues about how the company will get there. Several months later the sensors were incorporated in Tesla's carts but the collaboration was halted after a auto was involved in a crash. "Instead, Elon's only compensation will be a 100% at-risk performance award, which ensures that he will be compensated only if Tesla and all of its shareholders do extraordinarily well".

The compensation plan doesn't require Musk to stay on as Tesla CEO throughout the length of it, though the only other roles he's allowed to take are executive chairman or chief product officer.

"I expect to remain CEO for the foreseeable future". The company is required by California state law to pay him a minimum-wage salary that adds up to roughly US$37,000 per year, but Musk has never accepted it.