Tesla announced a date for the vote and special meeting about Elon Musk’s multi-billion dollar CEO compensation plan proposed by the board of directors a few weeks ago.

The meeting will be held on March 21st.

Tesla wrote in a proxy statement sent to shareholders today:

“The Special Meeting of Stockholders to consider and approve Elon’s CEO Performance Award is scheduled for March 21st. Under the Award, Elon’s compensation will be 100% at-risk, which ensures that he will be compensated only if Tesla and all of its stockholders do extraordinarily well.

The Award will ensure Elon’s active leadership and strategic vision over the long-term. Since Elon’s last award in 2012, Tesla’s market capitalization has grown 17x. The Board believes that the Award will continue to incentivize and motivate Elon to lead Tesla over the long-term, particularly in light of his other business interests.”

As we previously reported, the plan is built on top of Musk’s previous 2012 compensation plan that was based on reaching milestones and being awarded tranches of stock options for each.

Several of those milestones were based on Tesla achieving a larger market capitalization and they reached the last of those milestones – $43 billion – last year.

The new compensation plan is also based on Tesla increasing its market cap and it would need to increase to $650 billion for all of Musk’s stock options to vest:

It is also linked to a significant increase in revenue and adjusted EBITDA as seen in the chart above.

Each $50 billion increase would result in Musk receiving 1.69 million shares, which is currently worth about $600 million at today’s price, but if they fully vest, it would increase Musk’s stake in Tesla to around 30% – making him the richest man in the world through his stake in the automaker.

Tesla has already been presenting the compensation plan to its institutional and largest shareholders.

Here’s the presentation:

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Electrek’s Take

It’s without a doubt a very generous plan. Like I said, it could make Elon worth almost $200 billion if he achieves all the milestones.

But then if he does, and of course Tesla as a whole, achieve all the milestones, long-term shareholders will also see some unprecedented returns.

Sounds like a good deal? Let us know what you think in the comment section below.

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