Earlier this year, Tesla shareholders approved what is likely the largest compensation package ever awarded to a CEO — for a CEO who clearly doesn’t need the money. Elon Musk is already incredibly rich, and also doesn’t seem particularly motivated by further wealth. The psychologist Daniel Pink describes the primary sources of human motivation for people who have covered their most basic needs, such as food and shelter, as being autonomy, mastery, and purpose — and Musk seems like a prototypical example of that. He enjoys the autonomy to pursue moon shot projects, constantly strives for mastery in what he does, and has a strong sense of purpose. And yet this contradiction of motivations has mostly been absent from discussion of Musk’s pay.
Elon Musk’s Unusual Compensation Plan Isn’t Really About Compensation at All
It’s about communicating a long-term, ambitious vision to shareholders.
May 01, 2018
Summary.
Earlier this year, Tesla shareholders approved likely the largest compensation package ever awarded to a CEO — for a CEO who clearly doesn’t need the money. Elon Musk is already incredibly rich, and also doesn’t seem particularly motivated by further wealth. So why do it? In fact, the design of the compensation plan and its announcement were not about compensation at all. They were about signaling a credible commitment to Tesla’s purpose: to become a clean energy giant that helps address climate change by transforming mobility. To get there, Musk needs not only the normal sort of investor confidence, but also for investors to buy into his radical vision for the company.