Wow a man that has a company that actually has a product unlike most billionaires that make money by moving other peoples money around.
36
“I want to contribute as much as possible to humanity becoming a multi-planet species,” he said, alluding to a goal he has talked about often, including having people live on Mars. “That obviously requires a certain amount of capital.”
Love that.
13
Visionaries and innovators are routinely savaged by the ignorant and the idiots among us. Every great advance made by humanity has been accomplished by the "dreamers" and the "futurists".... certainly not by the critics, naysayers and skeptics. Most of whom will never contribute to great ideas, projects nor innovations.
16
I don't care if cynical people see what he wants to accomplish as showmanship. I don't care if he is crazy. Envisioning something so big and pushing so hard and far sounds more like what I thought America was than anything I have heard in a long time. He gives me hope and it makes me happy. And I'll be darned if he doesn't seem to be pulling all of his machinations off!!
28
Folks like Musk, Bill Gates, Warren Buffett, etc. don't make their money on salaries. They make money on the base stock appreciating.
I'm neutral on Tesla, but the Tesla fanbois that are fooled into thinking this is some great concession by Musk are delusional. Just one more way for Musk to try to draw attention away from basic problems of execution at Tesla.
I'm looking forward to 2021 to 2023 when a variety of well capitalized, quality car makers, who are used to lots of competition are offering BEV's for the masses.
Then we can compare Teslas to something besides Musk's marketing promises. In the mean time, it will be interesting to see what Tesla does with its serious lead in building long range BEV's today, with only the hapless GM even in the long range mid priced BEV game with the Bolt.
1
I'm rooting for him. And there aren't many billionaires I root for. I think the story is in there.
He is trying to change the world. He is gambling, which is exciting, and if he wins then everyone in the world wins. So we all have skin in the game.
30
“Mr. Musk’s critics — and there are many — are likely to contend that the new compensation plan is just the company’s latest publicity stunt.”
That there are many Elon Musk critics is one heck of an understatement. The vast majority of the financial press routinely criticize Tesla’s and Mr Musk’s every move with chicken little call after call of a bust in the Tesla “bubble” as they salivate over Mr Musk’s sure to follow demise. They and the peanut gallery in the blogosphere who just can’t resist venting their disdain for investors who had the foresight to invest in and support Tesla are at least consistent — consistently wrong.
11
What Musk has accomplished with Tesla is a miracle, and especially annoying to all of those naysayers who scream “impossible, no way,” etc. Has he been accurate as to WHEN his visions will come to life? Nope – but he hasn’t been THAT far off most of the time. Question: With a tiny, new born company, with limited funding he was able to put a car on the road that blows away just about anything else on the road in every possible way – whether it’s performance or, infinitely more important and impressive, ecologically. Tesla was a couple of years late with the Model S. Is that such a crime?
Was the wait worth it? Another question: If Musk wasn’t around, sticking it their faces for the past 6 years do you think all of these companies would be telling us that “ . . . our EVs are coming in 2020 or 22 or 25?”
Maybe it’s the symptom of our times. With a con man in the White House, whose respect for others is measured in microseconds, and a “what are you going to tell me that I want to hear today?” attitude, it’s no wonder that cynicism has infected so many. When someone like Musk comes along, a breath of fresh air washes over us. Here’s a person not only with great vision, but also with the smarts and means to make it happen. Here’s a person who has the audacity, in Donald Trump’s America, to say: “I’m not in it for the money. I want to accomplish something for humanity.”
34
Supposing we reach Mars and colonists thrive there. Humans on Mars become... Martians. In only a few generations it would be Martians v. Humans.
I love Musk's big picture attitude, but maybe he should refocus on getting people into new living spaces on earth. Ocean cities for example.
2
Or building Model 3's at roughly the volume promised (5000 per week), by mid 2018 (meeting the date after "only" two significant slips?
It's fine to talk of Mars colonies I suppose, for SpaceX, but how is it that Tesla investors OR CUSTOMERS should be distracted by such speculation again?
He is young, that is why. The old white regime is over.
1
Elon Musk might have inspired Robert Downey Jr., but the Tony Stark character was created in 1963, eight years before Musk was born.
4
Much as Voltaire noted how the law forbids rich and poor alike to sleep under bridges, Mr. Musk's 'bold' plan is a load of hooey.
1) Stock valuation in our speculative age has nothing -- nothing at all -- to do with the actual value of a company in terms of shares-to-earnings. It's fraud, hot air, tulip fever - and all designed to keep the wealthy wealthy.
2) Mr. Musk may get no pay if Tesla doesn't meet its elaborate milestones -- at which point he can go home and weep atop a huge pile of his current $20-million fortune.
3) Mr. Musks' heady scent of confidence will enamor the company to those over-macho investors who love a good story and an old-fashioned 'maverick' -- remember those macho investors, who brought you two recessions and at least one burst bubble? Yeah, those fools who robbed you and me and paid no price. That's the choir Mr. Musk is playing to, and they ain't no angels.
4) Finally, like every story about executive pay, this tells me nothing, not one thing about how well Mr. Musk's employees, the real basis for his fortune, are actually paid, or if it's a living wage, or if it's a fair wage for all equal employees. I'm sure there aren't a lot of Tesla employees on Food Stamps, or many who make what Mr. Musk does, but why no discussion of them at all?
Imagine if transparency and decency in business were respected more than -- or even as much as -- testosterone-y 'swagger' and this kind of plutocrat's hubris.
"...Tesla sends him checks that pay him a little more than $37,000 annually. “I don’t cash it,” he said. “It just ends up accumulating in a Tesla bank account somewhere.""
I'm sure this is just hyperbole, as under California AUP (unclaimed property) law, Tesla is most likely required to escheat to the State of California unclaimed wages on an annual basis following a statutorily defined reporting period.
God bless him.
He is the real Dreamer who achieved something he is dreaming of.
Don't know much about his autos but his space stuff is the Real Stuff.
A young man after immigrating here, dreaming big - singlehandedly challenged a government monopoly.
And today, Mr Musk has given America a real choice in space.
And in his foot steps have followed several others.
He is a true game changer and a disruptor.
So, what he misses a target here or there - just the dream of getting your company ten times it's size - well, I wish I could even just dream that big.
A true inspiration to young Americans - he has made so called STEM cool and rewarding.
15
My concern would be for the employees... is he going to work his engineers to death for a low salary just to make those quotas? The great engineers are going to know their value and make an exit for somewhere they receive adequate compensation... leaving those less qualified in charge in a brain drain situation.
It's Silicon Valley. Probably the great engineers are getting paid in part with stock options. If Tesla's stock goes through the roof, probably they won't complain.
3
So what? More outlandish claims and selling, selling, selling? There’s a sucker born every minute will be Musk’s epithet.
I always have problem with corporate CEOs getting too high compensations. However, I must admire Mr. Musk's make or break approach. If he gets nothing without reaching a really ambitious goal, I think that he is entitled to an extraordinary compensation for changing transport industry in US and the world.
3
Really if I was him I would not take any salary, never!!!
20 years ago, Amazon's plans seemed preposterous, and today they are completely reshaping the retail industry and more. Tesla aims at completely redefining transportation, personal, family, commercial, public, as well as the energy grid, and probably much more (when "cars" are driverless, intelligent, and connected to, who knows, an AI/Blockchain architecture, what can't they do, what can't they bill ?). As with Amazon, if Tesla meets its milestone goals, the market will recognise the huge long term profitability and separate it from short-term "ramp-up" and "debugging" costs.
6
"To afford to live, Mr. Musk has borrowed against his shares, a practice that some corporate executives have questioned. Mr. Musk insists that the loans are such a small portion of his stake in the company that even if Tesla shares were to fall precipitously, it would not impact him or the company."
It is a good summary of the article! A public perception of sacrifice and calculated risk with a cushion. Tesla cars are beautiful and environmental conscious and he has a long term vision (multi planet species!) but his his claim resonates like a slightly populist argument.
I own a Tesla and am perfectly happy with it, hope Mr. Musk has continued success.
13
I've owned a Tesla Model S now for nearly four years, and 80,000 essentially peerless miles, including numerous trips off-grid to remote areas, it's by far the most enjoyable driving experience I've had.
If a company like Tesla can sustain the appeal for its vehicles with such peerless ambition, against sinister odds of mostly overtly territorial and uneducated conflict, stories like this about its CEO speak to the vision we should all strive for. I can only hope it continues and that Tesla, with its global ambitions, prospers, and that its continued naysayers are left with their mouths open and their option-betting pockets empty.
16
So many commenters have no idea what Tesla's valuation is based on.
Tesla will never be successful because they can produce as many cars as GM can - this is not why their stock commands a premium - it is a bet on software, alternative energy and space... and yes on Elon - who is smarter and bolder than you.
11
In terms of Elon Musk's bold compensation bet, there are at least two things worth noting. Firstly, he made a similar bet in Australia when he promised to build the world's largest battery farm in 100 days or the project was free. He won that bet. Secondly, Elon Musk is an African immigrant who makes money for our country by actually building things in America, expert opinion aside.
18
Don't forget that Elon Musk is also Canadian as well as American. His mother Maye Musk (a recent Cover girl model) is Canadian and she still lives in Canada.
1
A crazy bet ... meanwhile the fossil fuel industry is betting that if they destroy the planet, everyone won't die.
Elon may be crazy, but at least he's not stupid.
15
'tis the brave man with a $20 billion dollar net worth that risks going without compensation...
4
Surprised investors still invest in his ventures- but if you have the monies to..suppose just a risk if nothing else. He was tabbed the new darling to hang around with a few years ago...but is he a long term investment for your portfolio?
Yes, Tesla is a long term investment my portfolio from $20 per share to well over $300 now. You know what other “long term” investments I kept? IBM and GE. Until their stagnation / fall, those stalwarts of the old economy didn’t catch near the grief heaped on Tesla and it’s investors every day. Personally I’m very glad I had Tesla in my retirement portfolio to help make up for those “reliable” long term companies.
2
I guess what breaks my heart, reading many of these comments, is that a true visionary and substantive character like Elon Musk gets ruthlessly criticized, while we elect a man for president who has never had a genuinely meritorious day in his life. The criticisms here seem firmly rooted in jealousy, but our electoral prerogatives seem rooted in something equally self-destructive: we are making no distinctions in our role as iconoclasts.
39
Excellent point. Add to that one more "SAD!" assumption: many critical of Musk are not simply jealous witnesses to Musk's prerogatives but actual supporters of our faux president, subscribers to anti-elitism yet watchers of Fox News, think it's smart strategy to short TSLA no matter how much they've already lost, and who knows, perhaps they curse at every Tesla driver they see and also beat their children....I could go on and on. I'm probably not all that far off with my leftist generalizations, but many Tesla owners I know are kind conservatives, so it's gotta have something to do with just straight out hatred for someone who dares to be amazing, not to mention genius.
4
The compensation plan is an invitation to more scams, lying and accounting manipulation by Musk. its based largely on EBIDTA. That means that debt does not count. Profitability does not count. Also, its based on market cap, which means that acquisitions dont count.
There are a thousand ways this ridiculous plan can be gamed to enrich Musk, and it will be.
Tesla is a fraud of a company. Will go bankrupt in the next recession.
2
The real story is that Tesla is fighting an unnecessarily uphill battle. If the technology were being supported by our government, those goals might not seem so ridiculous. That we have abandoned all serious efforts in our government with the support of our automakers and Big Oil, to create laws and encourage development of new energy technologies is a primary reason that the EC market is not as healthy as it should be. Our leadership is protecting fossil fuel dependent companies and their paradigm as a means of keeping the wealth flowing to those who control it currently. Energy independence, cheap and efficient transportation that benefits the common man and the continued health of our planet are being sacrificed for greed. We are being denied and our government is providing the means to keep us from benefiting from these technologies. VOTE
9
Points missed in your "real story": Tesla may have been founded in the US, and its manufacturing based in the US. But it's a global company. More than half of its vehicles sold are now outside the US, and they are working on a manufacturing sites in both Europe and China in the near future. Big Oil and an antithetical Admininstration will not stop Tesla, much as they know Tesla, eventually, will likely overtake them. BTW - I've owned a Model S for four years, and it's by far the most satisfying driving experience I've ever had. If Tesla can manufacture its vehicles to that driver experience is essentially peerless, GM and Ford and possibly even Honda and Toyota, will soon be left behind.
9
Conveniently omitted was mention of any conditional clauses beyond the performance accelerators. What happens when Apple buys Tesla for $100 million later this year or early next?
But Tesla for a hundred million?
Try $60 billion.
1
$100 Billions maybe.
2
Sorry, Elon Musk is not the inspiration for inventor Tony Stark, also known as Iron Man. Tony Stark is that rare bird who is a chip off the old block, who in this case is Howard Stark, millionaire playboy inventor, who is played by Dominic Cooper in the Marvel films. Howard Stark is based entirely on the legendary Howard Hughes, who as we know, never had a son, let alone one named Tony or Elon.
4
I seem to remember Iron many about 50 years ago, so no Musk has nothing to do with the character of Tony Stark. And I seem to remember the Iron man armor being solar powered at one point as well. And hughes actually did things instead of just getting others to do so while being a showman.
We bought a Tesla Model S 75 three months ago. We are amazed how quiet and smooth riding it is. Best of all, we are going places emission-free. We charge at home via a 240 watt Tesla charger. However, we have used free Tesla 480 watt super-chargers at a shopping mall 10 miles away and one 150 miles north near Orlando.
Both of our neighbors have noisy gas guzzling Corvettes. Yet, our Model S is faster 0-60 than their vehicles.
20
Not to nitpick, but you mean "240 volt" and "480 volt." The wattage is *much higher.
4
Elsewhere on the DealBook we're being told Elon's deal is all or nothing. All or nothing would be $650 billion in market cap in 10 years or he receives nothing. What I'm reading here is a long way from all or nothing - he can do mind-bogglingly well without hitting that target.
2
Aren't they on several hundred billion in government subsidies?
You are off by more than an order of magnitude, and that's a pretty big miss: http://www.latimes.com/business/la-fi-hy-musk-subsidies-20150531-story.html
I'm not sure if you are implying anything further, so I won't bother to infer any meaning to your post.
Nope. Stop reading stupid people's articles.
3
What stood out in this article was the part about how, "Mr. Musk does not take a salary, although under California State law, Tesla is required to pay him at least minimum wage. Tesla sends him checks that pay him a little more than $37,000 annually. “I don’t cash it,” he said. “It just ends up accumulating in a Tesla bank account somewhere.” he doesn't cash the checks because he doesn't need them to afford to live.
Gross.
Perhaps he should be donating it.
1
Dear "Making It...Sort Of",
"Gross." How so? Is it incomprehensible to you that a person who has built real stuff (cars, rockets) and created real jobs may not be so destitute as to need a minimum wage paycheck? Hmmmm.
It could be said that he is donating it to Tesla.
1
All companies should do this! Massive compensation should only be given if you're actually successful as a CEO.
20
How about tying his compensation to actual performance, like, say, sales or revenue targets. Sick to death of the start up culture's focus on empty valuations. On paper, Musk is a failure. Just can't understand the fascination with him. His vision, yes. But his results, no.
3
Or actual profit, which I bet he has almost none of cumulatively.
2
There is a thin membrane between 'bold' as NY Times characterizes Musk's pay plan, and foolhardy. The problem is that this might prompt Musk to take unnecessarily precipitous if not dangerous risks just to increase the odds that he'll earn his billions. This is the very reason that financial advisors, for instance, are not usually paid on an incentive basis; they might do stupid things, to turn a bigger buck. My inkling is that this is more of the foolhardy than bold nature on the part of Musk and Tesla.
2
This is an amazing compensation package. Innovative and fair. Congratulations to Mr. Musk if he collects.
7
It's stunning to me the negativity and ignorance that surrounds electric vehicles. I have owned a Nissan Leaf for 9 months and will never look back. As battery capacity improves and range increases, there will be no reason to drive anything else. One of the big reasons traditional car manufacturers have not transitioned sooner is the multibillion-dollar car repair market. Electric vehicles are almost maintenance-free contrasting the 150 year old technology that still persists.
38
I, like many 50 year olds have owned many cars, some for over a decade. I have never paid to have anything more than oil and spark plugs on an engine. Repairs to batteries, A/C, suspension, brakes, tires, wheels, paint, body, etc have cost likely over $50,000.
Bodywork on a Tesla is well over double that of a BMW. Teslas cost more to maintain than comparable cars from other manufacturers.
Leafs are likely better in the cost department, but in any case engines are just not a failure point. They are still cars.
1
I'm impressed.
Tying compensation to productivity is a wonderful concept. The rise of supersalaries for top executives of large firms has exacerbated wage inequality in the US. The higher one climbs, the more spectacular the raises. At least Elon Musk is justifying his high level of compensation.
16
"And it’s impossible for him to manipulate the system by trying to prop up the stock price for a temporary period. Under the terms of the arrangement, even once his shares vest, he has to hold them an additional five years before he is allowed to sell them."
This is nonsense as written. Musk can manipulate the system so as to be awarded as many shares as possible. If the shares go down after that to their "natural" level, he still wins by having more of those shares.
4
Manipulating the stock price is one thing and it's certainly possible in any company. What you missed is that the second condition has to also be concurrently met at each level. Those are revenues and profit figures which you can't 'fudge' without having real, tangible operational growth.
4
@BL. As I said, as written. The passage I quoted doesn't mention revenue and profit figures. It just says that, because vested shares have to be held five years, it's impossible to manipulate the arrangement. Which is patently false.
At this point do you really think he personally cares about money that much to manipulate metrics to add billions to the billions he has already?
I'm impressed! We constantly read about CEOs who are "critical to the successful future of the company" and therefore deserve the millions they get paid, the hundreds of times higher salaries than ordinary worker bees at the company. We celebrate those CEOs as somehow more capable, more visionary, more 'executive' than the rest of the workers, when many times there are a dozens of people at the company who are just as capable, just as important, but don't get the headline or the eight-figure paychecks. We conflate business success and luck with ability to lead and inspire, which is much more rare.
Here is one CEO who definitely doesn't need the money, and puts his reputation on the line. Musk could claim with good reason a multi-million dollar salary, based on prior performance. He's a real visionary, and he's builds really nice cars. Now he's set ambitious goals, goals in alignment with the shareholders, and is willing to take no money if he fails to meet those goals. How many CEOs have taken their multi-millions from shareholders, while their "leadership" has lost their company billions? Carly Fiorina, I'm thinking of you... "Oh, we'd have done much worse if not for me." isn't putting it on the line like Musk. Once you have a few million, this should be the mandatory CEO compensation package for all CEOs.
7
Musk currently holds $70 million dollars worth of real estate in Bel Air and is building one of the largest properties LA has ever seen, and none of his companies have ever turned a profit. Only a fool could believe Musk isn't in it for the money.
6
More CEO's should take a page from his book. That being said if he doesn't draw a salary or a bonus I think he will squeak by. That $37,000 he collects can pay for his ties.
1
Since Musk owns $20 billion or so worth of stock, a prudent board would pay him exactly nothing. Plain logic (combine with ego) would demand he stay to protect his stock.
Changes challenge people to adapt to them, and this country is arthritic on energy. Tankers and oil wells catch fire, sending black smoke into the air and killing people while they burn and blow up, but we can't imagine putting solar panels on our roofs. Oil shares are selling higher now. Whoopee, we're all gonna die.
2
" it was only natural that investors would expect that the model for Robert Downey Jr.’s Tony Stark character in “Iron Man’’"
Uh...what?
Tony Stark is a genius engineer. Elon Musk writes checks.
2
Tony Stark is a fictional comic book character. Elon Musk is the lead designer of SpaceX and product architect of Tesla in real life. But sure, keep on idolizing Iron Man.
6
Not only that but Tony Stark is really based on...comic book character Tony Stark, who debuted in 1963 :) (who was in turn based on Howard Hughes)
"Elon Musk is the lead designer of SpaceX and product architect of Tesla in real life."
Are you seriously, genuinely under the impression that Musk actually does major engineering work on his company's products? He's a businessman. We can argue about the relative value of his contributions to society, but stick him in a cave full of electronic components, all he's going to be able to build is a pile of components.
You can't say he's not putting his money where his mouth is.
5
Why not? What part of this deal requires him to inject his own money into the company?
You certainly can. Valuations do not equal results.
Not in the short run, but in the long run they absolutely do.
1
From the press release:
Each of the 12 tranches vests only if a pair of milestones are both met.
Market Cap Milestones: To meet the first market cap milestone, Tesla’s current market cap must increase to $100 billion...
Operational Milestones: To meet the operational milestones, Tesla must meet a set of escalating Revenue and Adjusted EBITDA targets (the only adjustment to EBITDA is for stock-based compensation)...
When I read the title of this article, I was excited to see what pay plan Tesla had in mind for their blue collar workers who work in their factories. But as usual, the focus is on executive pay. Elon Musk will only be "bold" when he allows his workers to unionize.
6
I hadn't realized it was up to him. Is there something peculiar about California law that allows CEOs to lawfully prevent their employees from unionizing? That would be very surprising. Is it possible Elon's workers don't currently want to unionize?
2
In fact they have voted not to unionize several times. However that may be changing, especially considering the crushing workloads they are under to meet Tesla production goals.
I stand corrected. there has not been a union vote (yet) at Tesla.
Some of the naysayers in these comments are amusing. What I'd ask those who think Tesla is overvalued or worthless: what did you say about Apple thirty years ago? Or Amazon ten years ago? What makes Elon Musk important, and the reason I'm a fan, is that he supports big and important ideas. Tesla cars are beautiful, but his PowerWalls and self-driving trucks are things that we badly need. GM and Ford could take a leadership position in these ideas, but they are too busy in just making money. Musk and Tesla invest in ideas and in our future. It's as simple as that. I'm a Tesla fan but not a zealot. I won't go camping outside their stores before a new product is released, but I believe that in 30 years, Musk will be regarded as one of the visionaries of our time.
48
Or he won't. Probably one or the other.
Bryan, GM and Ford are doing far more than Musk or Tesla, but they don't get the fawning press coverage Ironboy does. If you Google GM and self driving I am sure you will find plenty you didn't know.
Yes, I get it, Ford and GM are "doing a lot." I made the mistake of buying a Ford electric vehicle a few years ago--a total piece of junk they barely supported. People said the same thing you did about Michael Dell while Steve Jobs was alive--"Dell is doing a lot, too." And he was. My point is that Musk is pushing ideas forward that, eventually, Ford and GM follow, because the trail has been blazed. Musk, love him or hate him, is brave enough to take risks on the projects Ford and GM would never touch.
Beyond education and the quality of one's experience, some ego is necessary to drive one to take risk. Given the state of the Model 3 production levels, less ego display, and more results would probably be a more effective method of improving cash flow and upping the value of the company.
2
The way I see it, if Elon succeeds, then he may have contributed more to the sustainability of mankind than almost any other person living. When the government refuses to do enough, then it takes a lot of money for people like Musk to do the heavy lifting. At the end, if successful, he'll have much less money than Jeff Bezos (and exactly what has Amazon done to contribute?) and will be MUCH more likely to give most of it away.
32
So "get the stock price up" is really all he cares about in this scheme? Why not tie compensation to getting M3 production up to 10K per week by Q4, or actually having semis built (not hand built) by the end of 2019 as promised?
5
Your "targets" are laughably stupid at this point.
This kind of targets were put in place a few years ago when Tesla was producing a handful of cars, if you want search for Musk's first compensation plan.
Right now Tesla is at a point where the stock price/market cap is pretty much tied to Model 3, Model Y, Semi, etc production targets.
If they achieve nothing the stock will plummet and the company will die.
It seems to me that stock price has little to do with the company's health. Why not tie compensation to number of vehicle deliveries, or hitting the target of having the semi and Roadster in production by the end of next year, as Elon has promised?
1
Shareholders are the ones compensating Musk here. Shareholders' number one concern is share price, and this directly aligns both parties' incentives. Can you imagine the headlines if Tesla is in dyer financial straits near the end of 2019 but Elon is rushing out the Roadster and Semi to unlock his shares?
An unhealthy Tesla will never get near the $650B market cap needed with this plan.
2
Please clarify the benchmarks. It says the salary depends on market value. It also says there are benchmarks for revenue and adjusted profits. Then it says he has to hit "both." "Both" means two. Which of the three make up the two? Or are two combined into one? This doesn't make sense.
2
No one gave microsoft a chance when they started. $10,000 then make you very rick now. I'm thinking Tesla is one of these Co. . 10 or 20 years will tell.
I'm in !!!
2
Skin in the game. Every American CEOs should be compensated like Elon: No bold gain = no pay.
23
Looks like it is time to start a Go Fund ME account. This "risk taker" ony has a few billion set aside. How WILL he manage?
Pay tied to job performance. What a novel concept. Now let's try it with the president, the House and the Senate.
56
Elon has buttons on his cuffs, not links. That says it all to me.
But I'm not above wondering if that potent image wasn't staged. Having worked in the theatre, I know many costume designers who'd make this kind of choice for a character in the play they had to dress.
1
Didn't he say in 2017 that he wants to be the first to explore or land on Mars in 2018? His stock went up when news was exciting. His stock went down when reality failed to fulfill the promises. I am sure he is a very capable person, but also with an ambition to con the Wall Street financial experts. If Wall Street can produce Madoff to fool them once, why can't Silicon Valley produce Musk to fool them twice? Only this time, it will take longer time to prove.
2022 was the year he has planned to land on mars.
3
Comparing Musk to Madoff is like...well, I dunno. Musk has made the most highly regarded automobile br Car and Driver...ever. And umm, oh yeah I remember. He puts rockets into space.
1
Any plans to make
an affordable Tesla?
7
Base price of the Model 3 is $35,000
Tesla is doomed to fail. Massive automakers are making electric, self-driving vehicles. And those companies actually know how to make cars, unlike Tesla
3
You are joking, right?
Around 80 million cars are sold annually worldwide. Do you know how many companies are profitable with a tiny fraction of that pie?
You guys act like Tesla has a 100% market share right now and if someone else enters the market then Tesla will fail.
Let me tell you, that's so laughably wrong you sold be ashamed of yourselves.
His critics are amazing. Look at how many electric vehicles now exist. Look at how many cars now have some self driving technology.
As to the compensation package, good for them. Corporations are busy paying way too much money to CEOs regardless of whether they pull a company into bankruptcy or success. It is a crazy model, devoid of any rationality.
57
I can't think of a corporate CEO or incredibly wealthy man that I admire and won't speculate as to all his motivations, but Musk at least seems different from most of the wealthy today in that he appears to want to accomplish something professionally beyond just trying to be the richest. The compulsion of the obscenely rich to obsess so determinedly on getting richer (and not letting the poor get a penny of their wealth) is sociopathic. Even if Musk is a modern day PT Barnum, it's preferable to the others.
110
Elon has always been honest about his motivations and ambitions, which have been with him since childhood. His actions have always been consistent: he wants to give Homo sapiens the best chance at long-term survival. He identified two major ways to hedge our bets against calamitous, extinction level events.
First, do everything possible to prevent the worst consequences of climate change by transitioning the world to a carbon-free economy: start by building an electric car that is economically and logistically practical, create the infrastructure to support charging these vehicles.
Vertically integrating the company allows Tesla customers to control their energy from production to storage to consumption. As he likes to say, the argument for renewable energy is tautological; at some point we will run out of fossil fuels and be forced to use renewable energy. We also know that doing this would heat the planet so much that it becomes uninhabitable for us and millions of other species. Why would we allow this to happen, it would be the stupidest experiment in history.
Second, make humanity a multi-planetary species by establishing a permanent settlement on Mars.
How many CEOs would stake their entire livelihood and reputation on a venture whose only purpose is to prevent the human race from going extinct? Elon will be remembered as the most ambitious person of the early, and possibly entire, 21st century. He will inspire a generation of dreamers to renew our civilization.
6
Most people can't change the world for the better, but we can support those who do, just like each one of his employees. Everyone of his companies goals is to help mankind in one way or another. The sad part is that most people only want to make money off his companies to stuff more possessions down their soul. I'm getting a model 3 not because I need it, but because it's the small thing I can do to support his companies. For those who aren't smart enough to see the future, Tesla cars that come out after the model Y will be even cheaper. The first cell phones were only for the rich..remember?
16
First, I agree Musk is a force for good and trying to improve the world with his ideas and business practices. But when you look at all the problems with electric cars they are not the way of the future in any large scale unless you can make the electricity itself with solar or some other green energy. Because otherwise you just move the emissions to the power plant and each step of the way you lose a lot of efficiency by the time you use the electricity the efficiency is on par with gasoline, where we started and the emissions still exist if you used coal, oil, natural gas etc. to power the plant. You want the fuel of the future? It's hydrogen and can only be hydrogen. Why? Batteries are heavy, inefficient and terrible for the environment, and in a quest to lighten the vehicles they are made from more exotic materials like magnesium and aluminum which take a lot more energy and pollution to produce than steel. Plus the materials get shipped around the globe from the mine to the processor to the battery maker to the factory. All that takes time, money and fuel. There was a study done maybe 10 years ago that looked at all the energy costs in developing, building, owning and recycling a car. They found a Prius was roughly equal to a Hummer. Which is why it costs twice what a Corolla costs despite being the same size and roughly the same fuel economy. So buy the electric car because you want it, but don't think it will make the world a better place.
2
Elon Musk was instrumental in getting the feds to turn their back on Hydrogen Fuel Cells. For that reason alone, I don't like him and won't drink the Kool-aid. If you think a tesla is some highly advanced machine but you poopoo the Chevy volt, there are things you don't understand...
1
One aspect to this is that Tesla of the future probably won't only be an auto company. Tesla of the future will be in autos (and trucks), large (no gargantuan) energy storage, grid services, solar (through the Solar City division), maybe wind, who knows what? So, if Tesla is defined in those broad terms, these valuation numbers might just work.
8
Solar combined with reliable, affordable residential storage systems will be the world's true "better mouse trap."
Mr. Musk, and Jeff Bezos, are prime examples of exactly what is wrong in the world today.
OUR government throws money at them like it's air. They just happen to be in the right place at the right time and are insatiably greedy enough to take full advantage of it. No social conscience.
It will all come tumbling down very soon and WE THE PEOPLE are the ones who will pay - just as we always have.
We got rid of OUR government-owned and operated NASA so someone like Mr. Musk and a few hand-picked private employees could reap the rewards? What's wrong with this picture?
8
Tesla paid back their loan early interest. What is the problem?
3
Interesting idea. How much has Musk gotten from the government for free (not loans) vs. spending on NASA? This could be a cautionary tale of how privatization loots the public coffers, but I don't see the evidence. Plus I think there will be plenty of people willing to buy stock. My guess is that the big talk will be enough to lure investors. Musk is filled with big talk. But I've read that a lot of it is smoke and mirrors.
1
Hello NJGLEA~ Re: "We got rid of our government-owned NASA ..." Even though the Republicans have cut NASA to the bone and we surely need our own transportation to the space station, NASA scientists and engineers are still dedicated to toiling for the American people. Mars Rovers, climate research, etc. You are correct though that now scientists are forced to vie for more industry funding due to cuts and industry is reaping rewards while science sometimes takes second place. Yes, we are a NASA family.
3
The confusion that arises is Mr. Musk's vision to assist humanity to become a "multi-planet species."
Plenty of evidence reveals that unless we learn here first how all may thrive, find meaning, fulfillment well being, prosperity and more - however measured, including the planet Earth - then we'll repeat the unconscious carnage of new planets and people.
A new relationship among business, governments, institutions and global civil society is required to generate the results listed above. And all the technology in the world will be rendered useless unless that occurs.
If leaders commit to that future, what a world this would be.
And the worlds that follow.
8
I have a problem with "however measured".
But wouldn't a clean slate on another planet be a great place to experiment with new social structures?
1
Yes-- what is meaning, fulfillment, well-being and prosperity? How they are measured is the crux of the issue. I think just about everyone agrees these are good things, in the abstract. The "problem" is that we define and measure these things in different ways, given our socio-economic and political orientations. I don't think I'd want to create a world where somehow we orchestrated agreement on these issues, because the differences, while maybe some way are limiting to our growth as a society, are an outcome of the diversity of human thought and morality.
I can understand the skepticism here. It is difficult to fathom that market capitalization of Tesla is higher than GM given a very weak balance sheet. I suspect that there are no significant IP assets either that Tesla can claim to justify the valuation. It has advantages such as the SuperCharger Network and the potential to provide a one-stop shop for all energy needs for a consumer in the future but not sure it can justify the premium. However, one way to look at it is that Tesla is like Amazon which continued to lose money but innovated itself out of it and today is more just an online bookseller. The compensation scheme news is definitely an attempt to convey to the market his commitment and belief. Yes, he smartly did not tie it to Proft and Loss but it does allow him more freedom to execute his game plan. It could be a light at the end of the tunnel or a runaway train. Only time will tell. His Charisma and his commitment make me a believer.
P.S. I am a Tesla car owner and hoping to get solar panels on my roof later this year.
32
Musk is selling a dream that we can continue to conspicuously consume while simultaneously saving the environment. It's no wonder he's so popular.
Why, we can all live in suburban McMansions with solar roofs and commute solo in our 4,000-lb electric cars. It's foolproof.
25
Lemme guess...you're a vegan, garden-growing knight, who thinks kind thoughts about those you love and speaks kindly to all children, who bikes to work (if you work) and prowls the internet for less-sinister trolling of thieves, scammers, liars, pedophiles, ticket scalpers, and Elon Musk fans.
I wish you well in your present and future life.
1
If only we can get all CEO's to have a similar pay package we'd be much better off as a nation. The current executive incentives encourage short term thinking that dramatically enrich the executives at the expense of long term viability of the firm and of the nation.
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I will leave pondering the business side of Tesla to those who understand it. For my own part, I recently rode in a 2017 Tesla, and it was an eye-opening experience. We had been on the highway about 15 minutes when it dawned on me that the driver did not have his hands on the steering wheel. The car stayed politely within the lane and a safe distance from other vehicles, even when passing. The ride was smooth and silent. The roof of the car was entirely glass, deeply tinted, revealing an IMAX-like view overhead. When we parked, the driver opened the hood of the car to reveal...nothing. No engine! When we later returned to our parking spot, the car was tightly hemmed in on both sides by other cars, so the driver pressed a button on the remote and the Tesla crept backward until it was alongside us and we could open the doors unobstructed. Then we silently wooshed home. I'm glad the Tesla was my introduction to driverless driving--there was no time to overthink it and become worked up about it. I may not know a lot about Tesla's business model, but this much is clear: It takes a radical visionary to bring something like this into the mainstream, and so far Elon Musk seems to be the man for the job.
216
That's great if you are rich, but how many people can afford a $110k+ car? The Model 3 is a budget model of the S with few of the bells and whistles that make it unique. Yes, it is electric, but that's about it.
4
It would seem the way into the future is inverse to what it was for Mr Henry Ford's model T. He sold so his own employees could buy.
To accommodate our obscenely tremendous human population, science/technology has to pull out all stops to support our living arrangements.
1
Nope. That was not a driverless car, and if the driver didn't have his hands on the wheel he was disregarding Tesla's instructions to keep hands on the wheel at all times.
That's a parlour trick, and a dangerous one. Boggles my mind that so many seemingly intelligent people don't understand the distinction between rudimentary lane keeping assist and true autonomous driving technology.
6
Some people are concerned about things greater than money. I know how hard that is for people living in the dog-eat-dog world of capitalism to understand. Mostly because those people don't make the cover of Forbes magazine as the richest capitalist in the world.
35
does andrew ross sorkin believe that a man with a $20b net worth does not care about money? of course, anything's possible, but i'm more inclined to go with wise old barnum: there's one born every minute.
9
It seems Musk also cares about government subsidies and tax breaks, but i suppose that also equals money in his pocket. Nothing wrong with that if you can get away with it.
1
I know right? After he gets his big payout, Saint Elon will be canonized. Give us a break...
1
There is no doubt that Mr. Musk is a man on a mission; but what that mission is changes from time to time. I was one of those who, upon Listening to Mr. Musk at his reveal of the Model 3 on March 31, 2016, placed a $1000 deposit on one. I fell in love with the $35,000 car of the future that he was bringing to the mass market in 2017.
At that time I saw him as a devoted Johnny Appleseed of our electric future. However, after the real pricing of the Model 3 was revealed over a year later, I began to see him in a different light. The prices disclosed were more for the Rolls-Royce set than the mass-market: delivery cost, add $1200; want a color other than black add another $1000; power seats--that package is $5000; the larger battery most buyers want, another $9000; the self driving capability that was the heart of his 2016 presentation--an additional $8000.
It became clear that the focus for the Model 3, had switched from consumer to investor. But I also question how good is it for the investor to be pushing a "mass market" automobile in the $50,000-$70,000 range. In any event I am quite sure that GM, Ford, etc. breathed quite a sigh of relief when the final pricing for the Model 3 was revealed
19
My father said the real genius of the automotive wold was the man who crated the phrase "Optional Equipment Extra".
4
The base model is an incredible machine.
Lots of people want to believe...but it all has to do with Elon, and image. Those same folks won't wet their pants over two better cars, the Chevy volt and the Chevy bolt. Why? 1. Bow tie. 2. No Elon to wow them with charisma.
It's a self-referential bubble.
1
It looks like this is the beginning of the end for TSLA. Musk has lost credibility and is getting called out on his hype. The hype machine is getting more desperate by the quarter. Nov. Model 3 earnings call was an embarrassment, and media is not buying it anymore. Reality is now crashing into the fantasy valuation. We will all look back at the laughable absurdity that this "boy genius" was going to save the planet.
Ponzi.
Madoff.
Musk.
2
The compensation plan discussed in this very article has no benefit to Elon if what you are saying is true. "The Market" is not full of tree-hugging daydreamers like you make it out to be. Tesla's current valuation is the result of a lot of smart people estimating future profit potential and weighing possible risks.
There is nothing fraudulent about Musk or Tesla. They are trying to build a company based on offering a product that benefits consumers. To equate this to a Ponzi scheme shows a complete lack of understanding of both Tesla and pyramid schemes.
5
Yeah, the creator of tens of billions of dollars of investor wealth backed by real companies with world-changing products and technologies is totally comparable to Ponzi and Madoff. We are awed by the genius of your analysis.
Sorry your short position in TSLA isn’t working out.
21
It appears to have been forgotten that the EV bubble is built on the need to find an alternative to the emissions from fossil fuel vehicles that are damaging the atmosphere. Many wonder whether the production of electricity is the answer to the global problem. There is another alternative that has been clouded by lobbying from the oil companies. Whilst there is deforestation in the world, it is not connected with the production of liquid bio-fuel, the one enemy that the oil companies have fought for a century. Please look at www.cleanclimate.co.uk and pass your comments.
2
So, either he gets the cherry on top after Tesla reaches lofty milestones, or is just rich forever. I think he'll be fine.
16
How is a potential stock award of 1% of a 650 billion market cap 50billion? Wouldn't it be closer to 5billion?
1
10 years at 1% a year equals roughly 10%. (I'm guessing.)
1% of outstanding shares, not 1% of the value of the company.
Words are seductive, romantic, stuff dreams are made of. And numbers? Numbers just tell the truth. Nobody is interested in them. Elon Musk knows that. And so does Jeff Bezos. And people who buy shares in AMZN, NFLX, TSLA. Those of us who don't are the losers.
It's nice to have a person around who likes to think big. I'm tired of the petty minded politicians and the can't do attitude of many in the corporate world.
Good luck, Elon.
186
Stalin and Hiller also "thought big".
1
This is what a true, risk-taking believer in the free market looks like. How many other CEOs out there would be willing to make a similar offer to their corporate boards? Zero?
129
To me, the value of Tesla will be determined by the solar component of the company. Their new solar roofs are cutting edge and built to last for more than a hundred years and actually are attractive. Basically, solar roofs feeding into a battery storage system that runs your house or powers your EV car. Granted, not everyone will be able to take advantage of solar, but with a critical mass of adoption, it will help us cut our dependence on extracted resources like natural gas and oil and limit or cut the power plants. How long humans last on earth will be determined by how successful we are in adopting the new technology.
67
Well, then, I guess it's too bad that Trump just slapped a 30% tariff on key components of a solar system, which are mostly manufactured overseas...
1
For all of the good Musk has done in promoting EVs, that this company currently has the same market cap as GM speaks to a market infatuation which will end very badly. It is not enough to produce a great product, ultimately one must be able to make money doing so, and on this metric Tesla has continuously missed by a mile (or kilometer). The biggest question remaining is whether Musk's legacy of bringing EV's into the mainstream will be overshadowed by the ensuing financial carnage to investors when that "vision thing" is forced to confront reality. It'll be a great business school case study, that's for sure.
11
You're ignoring the fact that Tesla not only has to build cars, but also the tooling that goes with it. Much of that tooling is now in place and with the Model 3 roll out ramping up rapidly we'll see how the numbers change over this year.
It boggles my mind that random internet commenters think they know more about Tesla's prospects than Musk himself (otherwise he must be a flim-flam guy...)
They make a healthy profit on each car they sell, but that money (and new capital) is reinvested in the factory and infrastructure needed to ensure the companies ongoing viability. Or do you think building production lines is cheap or even free?
Trucking firms are lining up to get an early edition of the new Tesla truck, but guess what? They'll need to develop a facility to build them. And also guess what? That'll take money. Which investors will be happy to pay because the absolutely enormous potential return on investment from this company is unprecedented
They literally want to eliminate fossil based energy from the global economy!
129
Ten years ago, people were asking why Amazon, a startup that hadn't made a profit, was commanding the same market cap as Sears, a century-old retail giant.
I agree with you that Tesla vs GM will make for a great business school case study in the future.
146
I largely agree with your points, Robert Grant, but could you at least acknowledge that you yourself are also a "random internet commenter" whose knowledge of Tesla's prospects is not superior to anyone else's?
When Telsa is losing money at the rate it did last year, thinking of the long-run/end game certainly is ALL that investors can do!
1