Embattled electric car maker Tesla has come out and said that its billionaire boss Elon Musk will only be paid if the company starts performing.
Tesla has faced huge struggles of late – mountains of debt, staff lay-offs, production delays, and ever-present quality control issues. Now the company is taking harsh action by insisting its mega rich CEO won't be paid until the company achieves 'a combination of market capitalisation and operational milestones' in a bid to turnaround its fortunes.
Musk 'will receive no guaranteed compensation of any kind – no salary, no cash bonuses, and no equity that vests simply by the passage of time,' Tesla said.
Musk's new incentive includes a decade-long grant of stock options broken into 12 portions that Musk will only get if certain milestones are met by the company. The first milestone is to increase Tesla's market capitalisation to £72bn, with more stock options opening up at £36 billion intervals.
'Thus, for Elon to fully vest in the award, Tesla's market cap must increase to £465 billion,' the Californian tech company said. To achieve the operational milestone, the California-based firm said it must meet a set of ever-increasing revenue and adjusted earnings targets, which come before interest, taxes, depreciation and amortisation targets.
It's been a tough 12 months or so for Tesla, but it looks as if the company is finally starting to put the pieces in place for a turnaround, or so it seems. Will it be successful? We'll find out in the coming months. After all, one prediction is that the company won't exist by the end of summer.