On Tuesday, Elon Musk announced his plans to stay on as Tesla's CEO for the next decade. With that agreement, Musk also unveiled a new proposed compensation strategy, which Andrew Ross Sorkin in The New York Times calls possibly "the boldest pay plan in corporate history."
He would only be paid if Tesla reaches a set of aggressive milestones that will eventually grow the company's valuation to more than $650 billion. Tesla is currently valued at around $59 billion. While the plan would allow for Musk to earn billions more, if he doesn't reach the milestones, he would get nothing.
Musk is worth a reported $22 billion, but the official salary he currently receives from Tesla is far more modest: The CEO earns just around $37,000 per year. (Musk is also the CEO of SpaceX, which is privately held.)
If Musk had things his way, he says, he'd choose not to take a salary at all. But because California law prohibits him from earning less than minimum wage, he still draws a token salary, according to the Times.
The CEO can choose not to spend the money, however.
"I don't cash it," he told the Times. "It just ends up accumulating in a Tesla bank account somewhere."
Musk's not the only top executive declining pay. Taking only $1 in compensation has become something of a point of pride in and around Silicon Valley.
That's because a company's stock value speaks louder than a set salary. "The dollar salary really for them is meant to signify that they have large stakes in their company. The value they're going to receive — the compensation they'll earn — is coming solely from their stock," Aaron Boyd, director of governance for Equilar, a company that researches executive compensation, explains to Forbes in 2014.
In the past, Facebook's Mark Zuckerberg, Snap Inc.'s Evan Spiegel and Alphabet's Larry Page and Sergey Brin have all opted to take a single dollar in official compensation.
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