Tesla plans to pay Musk $1tn - do they really need him that much?

A great leader is a huge asset for a company, of course, but can anyone be worth $1 trillion?

That is the pay packet Tesla shareholders have approved for Elon Musk, as long as he meets the targets they have set over the next 10 years.

In the meantime he won't collect a salary, but will presumably throw himself into his work with renewed vigour.

Musk has attracted an army of critics, upset that he sided with US President Donald Trump, wielding his chainsaw at government programmes, and wading into politics overseas with explicit support for the far right.

But he has an equally large following of admirers, people who believe in his vision and don't doubt that he can achieve it.

It seems most of his shareholders are in this camp, after they backed his new remuneration package this week.

“He might have the talent but this is just making the rich richer :/”

“This is an abomination when wealth inequality exists. There are 831 million people in extreme poverty (less than $3/day), sharing Elon’s wealth amongst them is more than their yearly salary ($1200). The billionaire class are oppressors and they will be accountable to God. Money is not immortality.”

“I feel somewhat angry. Aldo “equally large following of admirers”??? I’m questioning whether this is evidenced in any way. No one should have a trillion dollars.”

“Can’t believe that anyone still likes this guy anymore. I hope he’s not going to get his hands on this money.”

“It’s abhorrent, nobody should be paid that much or earn that much. That much money is dangerous and will give one man too much power and influence. Especially for a man who is as seemingly unstable as Elon Musk”

“He's never going to meet those targets. And I think most of his shareholders know that.”

“No salary for 10 years is a bold move especially with those crazy targets he doesn't stand a chance of reaching”

Of course shareholders signed up, says New York-based financial analyst Dan Ives. If Musk succeeds - and Ives thinks he will - he will have created trillions of dollars worth of shareholder value, ample payback for investors.

Ives sees Musk as a "modern day Albert Einstein, a Thomas Edison".

Without the stupendous pay package, he says, there was a risk that within a few years Musk would have walked away, taking his Artificial Intellgience (AI) initiatives with him.

"Tesla without Musk is like pizza without cheese," he says.

Ives does not own shares in Tesla, but analyses the company for his firm Wedbush Securities and thinks Musk's "ability to go where others are not" means he may well achieve the targets that have been set.

"There's edgy behaviour, there's haters, but a lot of people love that. And that's why he's the richest person in the world.

"Does it help sell cars in Europe? No. But does it help Tesla win the AI race? Yes."

Very Happy: 3%

Happy: 10%

Neutral: 20%

Unhappy: 22%

Very Unhappy: 45%

Very Happy: 3%

Happy: 12%

Neutral: 35%

Unhappy: 23%

Very Unhappy: 27%

New Piece

Musk's political activities have prompted a backlash from some customers, including demonstrations outside showrooms earlier this year.

But Matt Britzman at Hargreaves Lansdown in London, who has invested in Tesla, says the impact is a drop in the ocean when it comes to Tesla's earnings.

Far from weighing on the firm's valuation, he reckons around a third of the value of Tesla can be attributed to what he calls the "Musk premium", value that wouldn't be there without him.

"It's a $1.4 trillion company, not based on the current car business. It's a $1.4 trillion business based on expectations of what it can deliver over the next three years."

And a lot of those expectations are fixed on Musk and his record of thinking big and thinking long term, he says.

With $1 trillion you could buy 20 million Model Y Teslas, at around $50,000 each. Or you could buy yourself a $10m house every day for 250 years, and still have change for furnishing and decorating.

The conditions appear to be very testing, including delivering 20 million Tesla vehicles and one million robots. A million self-driving Robotaxi vehicles will also need to be on the roads

Tesla's overall market value will need to rise from its current $1.4tn to $8.5tn.

However, the board does have "discretion" to decide when some of them have been met.

Source: BBC News