"For the most part, the targets are so gigantic that given Tesla's currently poor results and declining prospects, the chances that Musk will achieve even the lowest bogeys look highly unlikely, and the probability he'll capture the elevated ones virtually zilch. What's still inflating Tesla's stock price are Musk's extravagant claims for hugely profitable products, from FSD (Full Self-Driving) software to robotaxis to humanoid robots, that are constantly getting delayed, and none of which are yet reaching customers."
"Investors fondly recall that it was indeed the last pay deal from 2018 where Musk famously delivered on seemingly "mission impossible" goals that sent the stock on a moonshot and handed him tens of billions of dollars in Tesla stock. They're clearly hoping for something resembling a repeat. The news lifted Tesla's shares at the start of trading on Sept. 5 by around 5%."
On Sept. 5, the Tesla board unveiled a long-term compensation package that could pay Elon Musk up to $1 trillion between mid-2030 and 2035 if every target is met. The proposal recalls the 2018 plan that delivered massive value when Musk achieved ambitious goals and drove the stock sharply higher. The new targets are extraordinarily large and, amid weak current results and declining prospects, appear highly unlikely to be achieved. Promised future growth drivers—FSD, robotaxis, and humanoid robots—face repeated delays and have not yet reached customers. Future value will depend on net earnings and cash flows from Tesla's core auto franchise.
Read at Fortune
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