Even though Elon Musk is a self-made billionaire, his company, Tesla, isn’t profitable. Though Tesla has increased in value over the last several years, there was a point in 2016 when the company was losing $8,000 per minute according to Bloomberg News. But Musk clearly still believes in the company, because he has a radical plan to fix it.
Over the next 10 years, Musk won’t collect a salary for his work as Tesla’s founder and CEO unless he meets certain benchmarks in increasing the company’s market value, revenue and profits. His goal is to increase Tesla’s market value by $50 billion at each benchmark. There are 12 benchmarks, which means Musk has the lofty goal of taking Tesla from its current value of $59 billion to a staggering $650 billion. Yeah, it’s a little ambitious.
But, if Musk doesn’t hit those goals, he stands to make zero money in the next 10 years.
“If all that happens over the next 10 years is that Tesla’s value grows by 80 or 90 percent, then my amount of compensation would be zero,” he told The New York Times.
The plan isn’t fully in motion yet; Tesla’s shareholders still need to sign off on it. But there’s no reason why they wouldn’t, as it’s a win-win for investors. Either Musk succeeds and Tesla becomes one of the most valuable companies of all time or he doesn’t and the company saves on having to pay a CEO’s salary for a decade. And Musk’s gamble might just be the push it takes to get Tesla back in gear to release the highly anticipated Tesla 3, its affordable electric car, which has already been pushed back twice.
And considering Musk’s net worth, currently estimated at $21 billion, he’ll probably be OK without a salary for a little while.