Elon Musk, CEO of Tesla Motors, Inc., earned 2.635 million shares exercisable at $31.17 a share so far under his employee contract award. To earn these awards, Mr. Musk had to hit two sets of targets. 1st set were related to stock price which the company easily achieved. The second set were related to operational milestones: including production of new vehicles, number of vehicles sold and other tangible production dates. Understandably, Elon has reached more of the market capitalization targets (7 s o far), than the operational ones (5 so far). But the fact that he is minimally compensated for running the company but superbly awarded for increasing shareholder value on a sustainable level is reason to celebrate!

So far Mr. Musk has earned 2.635 million shares by reaching 12 of the 20 goals laid out in his contract. With a current market value of around $254.00 a share that means his wealth has increased by $587 million. Quite an accomplishment to be certain, and the shareholders have been compensated even more since there are 132 million shares outstanding. So the market capitalization of Tesla since 2012 has increased by over $29 billion. On the operational side, let’s face it; he is the first person to run a car company with a viable and exciting electric car! Mr. Musk would have earned more shares if the operational milestones were reached as fast as the market capitalization milestones. With short sellers constantly betting against him it is obvious that the milestones (operationally) are difficult. From my vantage point he has the most wonderfully talked about American car since the Corvette of the 1960s, I think he deserves whatever he is paid. Another reason, maybe the more important one, for both investors and employees to celebrate the forward thinking of Elon Musk and his company is the fact that Tesla is demonstrating the proper method, in my opinion, of rewarding CEOs.

Source:

http://finance.yahoo.com/news/elon-musk-ahead-pace-1-171538715.html