{"id":658444,"date":"2026-10-18T13:28:19","date_gmt":"2026-10-18T13:28:19","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/658444\/"},"modified":"2026-10-18T13:28:19","modified_gmt":"2026-10-18T13:28:19","slug":"musks-trillion-dollar-pay-deal-has-a-convenient-escape-clause-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/658444\/","title":{"rendered":"Musk\u2019s trillion-dollar pay deal has a convenient escape clause \u2013 The Irish Times"},"content":{"rendered":"<p class=\"c-paragraph paywall \">A million robotaxis, a million humanoid robots, and an $8.5 trillion valuation \u2013 <a href=\"https:\/\/www.irishtimes.com\/tags\/elon-musk\/\" target=\"_blank\" rel=\"noreferrer nofollow noopener\" title=\"https:\/\/www.irishtimes.com\/tags\/elon-musk\/\">Elon Musk<\/a>\u2019s trillion-dollar <a href=\"https:\/\/www.irishtimes.com\/tags\/tesla\/\" target=\"_blank\" rel=\"noreferrer nofollow noopener\" title=\"https:\/\/www.irishtimes.com\/tags\/tesla\/\">Tesla<\/a> bonus appears to demand almost superhuman performance. <\/p>\n<p class=\"c-paragraph paywall \">There is, however, an easier (and less-publicised) way for Musk to collect the big bucks: just sell the company.<\/p>\n<p class=\"c-paragraph paywall \">A recent study of executive pay finds that enormous share awards usually fail to deliver for shareholders and that \u201cmilestones are far less demanding than they appear\u201d, with Musk\u2019s 2025 Tesla package offering a striking illustration of the risks.<\/p>\n<p class=\"c-paragraph paywall \">In Merging to the Moon: Astronomical Option Awards and Corporate Governance Failures, researchers examined 1.24 million insider stock awards between 1996 and 2022. They found that Tesla-style \u201cmega-grants\u201d subsequently underperformed comparable companies by 15 to 30 per cent over following years.<\/p>\n<p class=\"c-paragraph paywall \">Tesla\u2019s 2025 agreement offers Musk 424 million shares if the company reaches an $8.5 trillion market value and meets 12 demanding business milestones. <\/p>\n<p class=\"c-paragraph paywall \">Considered in isolation, the package looks like a properly designed pay-for-performance deal. Under the researchers\u2019 modelling, annual growth of 12 per cent in both Tesla\u2019s share price and earnings would leave the company just short of its profits target after a decade. <\/p>\n<p class=\"c-paragraph paywall \">If only one operational milestone was met (cumulative vehicle deliveries), Musk would get a payout of about $8 billion \u2013 a big sum, yes, but a fraction of the headline award.<\/p>\n<p class=\"c-paragraph paywall \">However, if Tesla is acquired, the agreement completely waives the operational targets. If Tesla were taken over, the same share-price growth could deliver Musk $448 billion to $545 billion at a typical 20-30 per cent takeover premium, or up to about $707 billion at a 50 per cent takeover premium.<\/p>\n<p class=\"c-paragraph paywall \">In other words, Musk could bag up to 88 times what he would earn on the operational track, without meeting a single operational goal.<\/p>\n<p class=\"c-paragraph b-it-article-body__interstitial-link\">[\u00a0<a aria-label=\"Open related story\" class=\"c-link\" href=\"https:\/\/www.irishtimes.com\/your-money\/2025\/11\/08\/as-tesla-sales-tank-musk-gains-a-trillion-dollar-pay-day\/\" rel=\"noreferrer nofollow noopener\" target=\"_blank\">As Tesla sales tank, Musk gains a trillion-dollar pay dayOpens in new window<\/a>\u00a0]<\/p>\n<p class=\"c-paragraph paywall \">The pay deal \u201cconverts a performance award into a transaction bonus\u201d, potentially allowing Musk to engineer a takeover through an affiliated company such as SpaceX, triggering a huge payout while bypassing the operational targets.<\/p>\n<p class=\"c-paragraph paywall \">Perhaps Musk\u2019s greatest feat of engineering is financial rather than technological: the salesman who persuaded more than 75 per cent of shareholders to back a pay deal that has \u201cessentially no analogue in market practice\u201d.<\/p>\n","protected":false},"excerpt":{"rendered":"A million robotaxis, a million humanoid robots, and an $8.5 trillion valuation \u2013 Elon Musk\u2019s trillion-dollar Tesla bonus&hellip;\n","protected":false},"author":2,"featured_media":658445,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[72,605,1189,61,60,2306,1188,1962],"class_list":["post-658444","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-elon-musk","tag-executive-pay","tag-ie","tag-ireland","tag-spacex","tag-tesla","tag-work"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/658444","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=658444"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/658444\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/658445"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=658444"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=658444"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=658444"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}