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Colombian Oil Major Reports Surprise Profits Despite Market Downturn

Colombian Oil Major Reports Surprise Profits Despite Market Downturn

Ecopetrol’s ability to significantly dial…

Elon Musk Won’t Get Paid Unless Tesla Does “Extraordinarily Well”

Elon Musk’s compensation as chief executive officer at Tesla for the next 10 years will be contingent on the electric vehicle maker achieving ambitious performance targets, including raising its market capitalization by nearly US$600 billion, the company said on Tuesday.

“Elon will receive no guaranteed compensation of any kind - no salary, no cash bonuses, and no equity that vests simply by the passage of time. 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 EV maker said in a statement.

Musk’s performance award consists of a 10-year grant of stock options in 12 tranches, with each tranche available only after Tesla meets both market capitalization and operational milestones.

For the market cap milestones, Musk will get the first tranche if Tesla’s current market capitalization (now at US$59 billion) increases to US$100 billion. For each of the remaining 11 milestones, Tesla’s market cap must continue to increase in additional US$50 billion increments. Thus, for Musk to fully vest in the award, Tesla’s market cap must increase to US$650 billion, the company said.

In operational milestones, Tesla must meet milestones of exponentially rising revenues and earnings before interest, tax, depreciation, and amortization (EBITDA).

“They are designed to ensure that as Tesla’s market cap grows, the company is also executing well on both a top-line and bottom-line basis,” Tesla said.

Related: The No.1 Challenge To The Oil Rally

The new performance award was created by Tesla’s Board of Directors, with Elon and Kimbal Musk having recused themselves, after more than six months of discussion and analysis and in consultation with third-party compensation consultant Compensia, Inc. Elon Musk’s new compensation award will be put up for shareholder vote in late March, from which Elon and Kimbal Musk have recused themselves.

Musk has always set very aggressive production and sales targets that Tesla falls short of meeting. The production bottlenecks for the Model 3—which is months behind the original production volumes schedule—has had analysts and Wall Street worried that the EV maker has been burning too much cash without reaching its goals and without posting profits.

By Tsvetana Paraskova for Oilprice.com

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