In the early morning of June 14, Beijing time, Tesla CEO Elon Musk's sky-high salary of $56 billion, which was rejected several times, was finally voted on at the 2024 shareholders' meeting, and Musk became the highest-paid worker in the automotive industry.
The formulation of this sky-high salary dates back to 2018.
At that time, Tesla had just completed the delivery of 100,000 vehicles a year, with a loss of $2.2 billion for the year, and was facing a series of problems such as large-scale delivery and how to make a profit.
But at the same time, Musk has just completed the first 10-year equity incentive plan formulated in 2012 - a strict performance target that divides market value growth indicators and production and operation indicators step by step, and Musk will get corresponding options instead of salary or bonuses after completion.
Musk achieved the market value target in 2017, and the business target also reached level 8, so the second and bolder ten-year equity incentive plan was born.
The equity incentive plan also sets a market capitalization growth target of $50 billion at the first level, setting a 12-level target, of which the 12th level requires Tesla's market capitalization to reach $650 billion, and for every milestone reached, Musk can get 1% of Tesla's shares.
The production and operation goals include 16 indicators (8 are related to revenue, 8 are related to EBITD, that is, profit before income tax), and Musk can choose 12 of them, and all of them are completed to achieve a pair of small goals.
After achieving each goal, Musk has the option to buy 1.69 million Tesla shares at a price of $350.02 per share, and after all the goals are achieved, Musk will receive a total of more than $50 billion in stock awards, and these options can only be fully realized if Musk holds them for at least five years.
As of the end of 2023, Tesla's market capitalization is about $790 billion. Meanwhile, in 2023, Tesla delivered 1.8 million new vehicles, with revenue of $96.8 billion and a net profit of $15 billion.
Source: Tesla
However, such results still did not allow Musk to get a sky-high salary.
Musk and several of Tesla's directors have been sued by a minority shareholder who owns just nine shares of Tesla stock, who believes the compensation package is unfair.
After all, in the U.S. auto industry, General Motors CEO Mary Barra (Mary Barra) has a total salary of $27.8 million in 2023, and in Europe, Stellantis CEO Tang Weishi's salary in 2023 is 36.5 million euros. And Musk's salary can be called the highest salary in the automotive industry.
Earlier this year, Delaware judge Kathaleen St. Jude McCormick ruled that the compensation package was invalid, which also added a lot of uncertainty to whether Musk could ultimately receive the option award.
However, Musk's compensation package involving $56 billion was finally approved by 73% of the votes in favor through a shareholder revoting.
This is enough to see Musk's recognition among Tesla shareholders.
However, before that, Tesla had just undergone a sea change internally.
At the end of April, Musk visited China to promote the implementation of FSD in China, followed by May, Tesla laid off 20% of its global workforce, and Musk laid off the entire supercharging team, which is also seen as one of the signals of Musk's strategic adjustment to Tesla.
Source: Internet
As the dust settles on the sky-high salary, at this shareholders' meeting, Musk also ambitiously announced the next Tesla's development priorities.
Regarding the supercharging network that is rumored to be cut, Musk said that Tesla will invest $500 million this year to further expand and improve the supercharging station network;
Musk also "spoiled" the Cybertruck, which is very popular in the United States, and may make a special version of the Cybertruck for China and the European Union in the future.
Musk also revealed that last week he officially approved the mass production plan of Tesla's electric truck Semi. He said that Tesla Semi will bring substantial value to enterprises because it can provide operators with significant cost savings, thereby improving operational efficiency.
Regarding the 4680 battery, Musk said that the cost of Tesla's 4680 battery is higher than that of the supplier, but it is expected that the cost will be balanced by the end of this year.
About FSD: Static object collisions have been almost completely eliminated; Tesla is trying to solve the problem of AI model testing by loading models in shaded mode, and thousands of complex intersections have been identified in the United States for testing.
Source: Internet
Musk also mentioned the robo-taxi model, in which some vehicles will be directly owned and operated by Tesla, while others will be owned by Tesla customers. According to Musk, this strategy gives Tesla owners full control over the use of their vehicles, giving them the flexibility to decide when to invest their cars in Tesla's robo-taxi network to maximize value.
Source: Tesla official
In the Q&A session of the shareholders' meeting, some shareholders asked, what would Tesla's prospects be without Musk's leadership?
Musk said that he is a booster of Tesla's bright future, and the most important thing for a company is not the innovation itself but the speed of innovation. Musk's biggest contribution to Tesla is to promote the company's pace of innovation.