Tesla’s new pay proposal for Elon Musk is a dramatic echo of its past, specifically the high-risk growth bet it made with the 2018 compensation plan. The company is essentially doubling down on a strategy that, while successful in generating growth, was legally contentious and concentrated immense risk on one person.
The 2018 plan, which offered a then-staggering $55.8 billion bonus, was contingent on Musk hitting aggressive market capitalization and operational milestones. He succeeded spectacularly, and the company’s value soared. However, that deal was later voided by a court that found the approval process flawed.
The new plan uses the same basic framework—massive, all-or-nothing rewards tied to exponential growth—but amplifies every variable. The potential payout is nearly twenty times larger, and the targets are exponentially harder. It is the 2018 strategy on steroids, designed to be both more motivating and more legally defensible.
By proposing this sequel, the board is signaling its belief that this high-stakes model is the only way to incentivize Musk and achieve the next level of growth. They are asking shareholders if they are willing to see history repeat, betting that the spectacular returns of the last bet can be replicated on an even grander scale.