For the last several years, there has been speculation about Elon Musk's future at Tesla, and whether he would step down as chief executive in the next year or two.
Mr. Musk stoked that speculation as far back as five years ago when he said he wanted to stay through the introduction of the Model 3. Then in 2014, he said, "I'll have to see, you know, how things are going at that point," adding, "I will certainly be the C.E.O. for the next four or five years, and it's T.B.D. after that."
With the success of Mr. Musk's various other endeavors, such as Space X, his aeronautics company, it was only natural that investors would expect that the model for Robert Downey Jr.'s Tony Stark character in "Iron Man'' might move on to a different role at Tesla.
More from The New York Times:
Once Cozy With Silicon Valley, Democrats Grow Wary of Tech Giants
21st Century Fox Bid for Sky Is Provisionally Rejected by UK Regulator
Richemont, Doubling Down on Online Luxury, May Buy Yoox Net-a-Porter
Well, it is now four years later, the Model 3 had its debut last July (though production delays have slowed the rollout), and Mr. Musk's to-be-determined declaration has been determined: He told me he had agreed to stay on as chief executive at Tesla for the next decade.
The company is planning to announce on Tuesday Mr. Musk's new compensation plan, and it is perhaps the most radical in corporate history: Mr. Musk will be paid only if he reaches a series of jaw-dropping milestones based on the company's market value and operations. Otherwise, he will be paid nothing.
Tesla has set a dozen targets, each $50 billion more than the next, starting at $100 billion, then $150 billion, then $200 billion and so on, all the way to a market value of $650 billion. In addition, the company has set a dozen revenue and adjusted profit goals. Mr. Musk would receive 1.68 million shares, or about 1 percent of the company, only after he reaches milestones for both.
But to put these numbers in perspective, Tesla is worth only about $59 billion today.
If Mr. Musk were somehow to increase the value of Tesla to $650 billion — a figure many experts would contend is laughably impossible and would make Tesla one of the five largest companies in the United States, based on current valuations — his stock award could be worth as much as $55 billion (assuming the company does not issue any more shares over the next decade, which is unrealistic.). Even reaching several of the milestones would bring him billions.
Mr. Musk's critics — and there are many — are likely to contend that the new compensation plan is just the company's latest publicity stunt. He has been called a modern-day P.T. Barnum who has created the illusion of success while consistently missing production estimates. The company continues to lose money; at one point last year, it was losing almost a half-million dollars an hour, according to Bloomberg News. Jim Chanos, a short-seller who has bet against Tesla's shares — and has thus far been on the losing side of that trade — has contended that Tesla is worthless.
But Mr. Musk's compensation plan is no illusion: He gets paid only if the company succeeds over the long term with significant gains in market cap. And it's impossible for him to manipulate the system by trying to prop up the stock price for a temporary period. Under the terms of the arrangement, even once his shares vest, he has to hold them an additional five years before he is allowed to sell them.
The way the arrangement is structured, each milestone is a blunt instrument: He either reaches it or gets nothing.
"If all that happens over the next 10 years is that Tesla's value grows by 80 or 90 percent, then my amount of compensation would be zero," he said. (His calculations were based on the stock price at the beginning of this year when the company was worth about $50 billion.)
Still, he contended, "I actually see the potential for Tesla to become a trillion-dollar company within a 10-year period."
As executive compensation plans go, Tesla's is about as friendly to shareholders as they come. Many other companies have installed outsize packages that often come at the expense of shareholders because the executives get paid even when they underperform their peers.
Asked how he thinks shareholders should feel about Mr. Musk's new pay package, Ira Ehrenpreis, chairman of Tesla's compensation committee, told me, "It's heads you win, tails you don't lose," meaning if Mr. Musk is gaining billions then shareholders are winning, too. And if Mr. Musk does not perform, shareholders pay nothing.
Mr. Musk's new compensation plan is similar to the previous one put in place when the company was worth $3.2 billion in 2012. Only now, the numbers are much larger. That package also paid Mr. Musk only when he reached certain market value and operational benchmarks. And virtually nobody could conceive Tesla would be worth 17 times what it was back then.
Mr. Musk has reached all but one of the metrics in that plan.
Even though Mr. Musk's shares have vested, he has not sold them except to pay the taxes on the grants. His current stake is worth $13 billion.
Mr. Musk does not take a salary, although under California State law, Tesla is required to pay him at least minimum wage. Tesla sends him checks that pay him a little more than $37,000 annually. "I don't cash it," he said. "It just ends up accumulating in a Tesla bank account somewhere."
To afford to live, Mr. Musk has borrowed against his shares, a practice that some corporate executives have questioned. Mr. Musk insists that the loans are such a small portion of his stake in the company that even if Tesla shares were to fall precipitously, it would not impact him or the company.
If Mr. Musk succeeds in hitting some of his benchmarks, it would also mean that the company's employees, including those who work on the factory floor, who get paid in both cash and stock, could become wealthy.
Under the terms of the deal, which is subject to shareholder approval, Mr. Musk has to remain the company's chief executive, though the agreement would allow him to become chief product officer and executive chairman with a chief executive reporting to him. He said he saw that as a possibility only if the company became so large that he needed to recruit a top person to oversee the operations.
Mr. Musk has often said he is not driven by money. So what is it about this incentive plan that appeals to him?
"None of it is intended for dynastic wealth creation," he said. "The reason that it's important to me personally is that there's some pretty big things that I want to do."
"I want to contribute as much as possible to humanity becoming a multi-planet species," he said, alluding to a goal he has talked about often, including having people live on Mars. "That obviously requires a certain amount of capital."
WATCH: Elon Musk's long-awaited SpaceX blooper reel
