"In 2018, Smith accepted an unconventional offer: no bonuses, no meaningful salary (just $31,000 a year), and no equity unless he could grow Axon's market cap tenfold over the next decade. Each $1 billion increase unlocked a tranche of stock, with the ultimate goal of lifting the company's value from $2.5 billion to $13.5 billion. It was a daring bet, but one that paid off."
"Moonshot packages invert the standard logic of executive pay. Instead of the usual mix of salary, annual bonuses, and performance shares, they tie virtually all potential compensation to long-term milestones, often at seemingly impossible levels. Advocates argue that they strengthen alignment with shareholders, encourage long-term thinking, and inject urgency into the transformation process. Smith even extended a version of his plan to Axon employees, allowing them to trade portions of their pay for stock that vested alongside his."
Moonshot compensation structures replace traditional salary, bonuses, and routine equity with pay tied to ambitious long-term milestones. Rick Smith of Axon accepted a minimal salary and no equity unless he grew market capitalization tenfold, with stock tranches unlocking at each $1 billion increase; the plan coincided with Axon’s market value rising to roughly $13 billion and a large payout. Proponents claim the model aligns executives with shareholders, fosters long-term thinking, and creates transformational urgency. Critics point to high volatility, difficulty calibrating targets, asymmetric risk, potential investor backlash over outsized payouts, and governance concerns if goals are missed or achieved too quickly.
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