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Tesla won't pay Elon Musk unless ...

Elon Musk has a huge new incentive to make Tesla a bigger player in the car industry.Tesla said Tuesday that M...

Posted: Jan 23, 2018 2:39 PM
Updated: Jan 23, 2018 2:39 PM

Elon Musk has a huge new incentive to make Tesla a bigger player in the car industry.

Tesla said Tuesday that Musk won't get paid unless the company meets ambitious financial targets over the next decade.

The goal is for the electric car company to be worth $650 billion. Its current market value is just over $60 billion.

To put in perspective just how lofty a goal that is, consider that Apple, Google owner Alphabet and Microsoft are the only three American companies that have a market value over more than $650 billion.

Amazon, led by Jeff Bezos -- the world's wealthiest person -- is just a hair below that, with a market cap of about $649 billion.

If Tesla meets all its goals, which also include revenue and adjusted profit targets, Musk will receive stock worth $55.8 billion.

He'll get a chunk of stock every time Tesla hits another milestone for market value -- first at $100 billion, then every $50 billion more after that.

Until then, Musk will do without a salary, bonus or other annual stock awards from Tesla.

But he hardly needs a paycheck. Because of his ownership stake in Tesla, his investment in SpaceX and the money he made when PayPal, a company he backed, was sold to eBay, Musk is already worth more than $22 billion, according to Forbes and Bloomberg.

So can Tesla really grow to $650 billion and make Musk even richer?

Related: Tesla stock may be the new Big Short

Bulls argue that the mass-market Model 3 car will vault the company into the upper echelon of major car companies, alongside GM, Ford, Toyota and Volkswagen.

And Tesla stock has skyrocketed more than 920% in the past five years, including a 15% gain this year.

It's probably unreasonable to expect a repeat of that growth between now and 2023. But for the sake of argument, if Tesla's stock surged 920% more in the next five years, its market value would be just under $620 billion.

Tesla skeptics have pointed out that Musk has tended to be notoriously bad at meeting deadlines, which could give larger auto companies an advantage. After all, GM's Chevrolet Bolt and Nissan's Leaf are "cheaper" electric car options.

Some analysts also worry that Tesla is spreading itself too thin. It owns SolarCity, a solar panel company co-founded by two of Musk's cousins that is developing the Powerwall battery for the home.

So Tesla is trying to disrupt the auto market and the electric grid at the same time. All while he juggles SpaceX, The Boring Company and the artificial intelligence research firm OpenAI.

Related: Should Elon Musk merge Tesla and SpaceX?

Tesla seems to recognize the risk that Musk will be distracted. As part of the pay plan, Tesla said he must stay on as either CEO or executive chairman and chief product officer. That opens up the possibility that Tesla could one day hire a new CEO.

"This ensures that Elon will continue to lead Tesla's management over the long-term while also providing the flexibility to bring in another CEO who would report to Elon at some point in the future," Tesla said in a statement.

But Tesla added that "there is no current intention for this to happen."

Tesla has been a Wall Street darling, and there's a certain cult of personality among investors about Musk. So it may be a mistake to bet against him.

But even Musk has said several times in the past few years that he thought Tesla stock was overvalued based on current sales and the lack of consistent profits.

Then again, he's also claimed Tesla could be worth $700 billion by 2025.

Minnesota Coronavirus Cases

Data is updated nightly.

Cases: 604406

Reported Deaths: 7629
CountyCasesDeaths
Hennepin1249281777
Ramsey52501896
Dakota46829470
Anoka42767458
Washington27423291
Stearns22555224
St. Louis18138313
Scott17550135
Wright16374149
Olmsted13397102
Sherburne1201695
Carver1067248
Clay826092
Rice8200110
Blue Earth762544
Crow Wing681794
Kandiyohi667985
Chisago619852
Otter Tail585884
Benton582998
Goodhue483874
Douglas475481
Mower470633
Winona461351
Itasca459463
Isanti439964
McLeod430561
Morrison424862
Beltrami407861
Nobles407650
Steele397916
Polk389072
Becker386755
Lyon363853
Carlton352856
Freeborn346933
Pine335023
Nicollet331245
Mille Lacs311954
Brown307840
Le Sueur297326
Cass286132
Todd285633
Meeker263342
Waseca238023
Martin235332
Roseau211221
Wabasha20783
Hubbard196641
Dodge18783
Renville182446
Redwood176539
Houston174616
Cottonwood167124
Wadena163323
Fillmore157410
Faribault154719
Chippewa154038
Pennington153820
Kanabec146828
Sibley146810
Aitkin138937
Watonwan13579
Rock128719
Jackson122612
Pipestone116726
Yellow Medicine114920
Pope11306
Murray107110
Swift106918
Koochiching95417
Stevens92411
Clearwater89016
Marshall88817
Lake83220
Wilkin83213
Lac qui Parle75622
Big Stone6044
Grant5948
Lincoln5853
Mahnomen5669
Norman5479
Kittson49022
Unassigned48393
Red Lake4017
Traverse3775
Lake of the Woods3453
Cook1720

Iowa Coronavirus Cases

Data is updated nightly.

Cases: 371050

Reported Deaths: 6051
CountyCasesDeaths
Polk58259640
Linn21218339
Scott20307248
Black Hawk16139312
Woodbury15238230
Johnson1461985
Dubuque13509211
Dallas1128899
Pottawattamie11225174
Story1071448
Warren583891
Clinton561593
Cerro Gordo554093
Sioux517474
Webster515794
Muscatine4882106
Marshall486676
Des Moines467472
Wapello4338122
Buena Vista426940
Jasper421172
Plymouth403181
Lee382356
Marion366076
Jones300957
Henry294637
Bremer288461
Carroll286952
Boone268634
Crawford268440
Benton259855
Washington257251
Dickinson249344
Mahaska232651
Jackson225242
Clay216727
Kossuth216166
Tama211971
Delaware211143
Winneshiek198635
Page194522
Buchanan193833
Cedar192423
Hardin187444
Fayette186643
Wright186040
Hamilton181951
Harrison180073
Clayton171157
Butler166335
Madison164619
Mills163824
Floyd163442
Cherokee159338
Lyon158841
Poweshiek157036
Allamakee152952
Hancock150334
Iowa149824
Winnebago144531
Cass139255
Calhoun138913
Grundy137333
Emmet135841
Jefferson133435
Shelby131537
Sac130920
Union130035
Louisa129849
Appanoose129049
Mitchell126643
Chickasaw124817
Franklin123523
Guthrie123332
Humboldt119626
Palo Alto113623
Howard104922
Montgomery103638
Clarke100924
Keokuk96732
Monroe96431
Unassigned9560
Ida91535
Adair87332
Pocahontas85822
Davis85225
Monona82931
Osceola78916
Greene78011
Lucas77923
Worth7618
Taylor66812
Fremont6269
Decatur6169
Ringgold56424
Van Buren56418
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Adams3444
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