Remember that potentially crazy huge compensation package that Tesla's board of directors bestowed upon Chief Executive Elon Musk a little more than a month ago? Well, it still needs the approval of Tesla's shareholders.
Tesla doesn't want its shareholders to forget to vote, because on Friday, it made another filing with the Securities and Exchange Commission stating that it will hold a special meeting on March 21 for its shareholders to give their either their thumbs up or down on the proposal that has the potential to one day make Musk [pictured here] richer than Jeff Bezos, currently the world's richest person.
The company is advising shareholders to approve the plan. Musk, who already owns almost 22 percent of Tesla's outstanding shares, has said that he will recuse himself from the vote. Musk's brother Kimbal, who is on Tesla's board of directors, is also recusing himself from the voting process.
If approved, the plan is one of the most audacious compensation packages in history for any corporate executive. If everything breaks right Musk's stock options alone could be worth almost $56 billion, and he stands to potentially own a 28 percent stake in the company that could be worth approximately $182 billion.
However, Tesla said, in its original proxy filing about the March 21 shareholder meeting that "it is not possible to know the actual value that Mr. Musk will realize from the CEO Performance Award even if one were to assume that he were to fully vest in it."
That's because Musk's potential windfall is an all-or-nothing proposition, and based on Tesla meeting some sales goals and market-cap figures that would put it in a valuation zone close to that of Apple (with an $881.3 billion market cap) and Alphabet ($730.6 billion).
The plan requires Musk to remain at Tesla for another decade. During that period, Tesla needs to grow its market cap by increments of $50 billion, and eventually reach a valuation of $650 billion. Musk also needs to serve as Tesla's CEO, or stay with the company as both executive chairman and chief product officer, in order for all of his awards to fully vest.
Tesla is currently worth about $55 billion. When Musk's last compensation agreement was put in place in 2012, Tesla's market cap was $3.2 billion.
© 2018 San Jose Mercury News under contract with NewsEdge/Acquire Media. All rights reserved.
Image credit: Elon Musk Twitter page.
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