Tesla’s CEO is betting on drastic gains in market cap, which could leave him empty-handed.

Elon Musk’s earnings will hinge on a series of milestones spread over a 10-year period, based on Tesla’s market value and operations. As the New York Times explains, “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.” The company has also set a dozen revenue and profit goals. If they are reached, Musk would receive 1.6 million shares, about 1% of the company. If not, he receives nothing. As Musk put it, “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.”

But Musk expects Tesla to become a trillion-dollar company. As a starting point, Tesla is currently worth $59 billion. Achieving a market value of $650 billion – an eleven-fold increase – would make it one of the world’s most valuable companies, and one of the five biggest in the U.S. based on current valuations. Musk’s stock award would be worth as much as $55 billion, though that depends on Tesla not issuing any more shares in the coming decade.

Critics are calling Musk’s executive compensation plan a publicity stunt. Some, comparing him to P.T. Barnum, say that he has created the illusion of a successful company, which on paper is losing money. However, the plan itself is not so much an illusion as a high-stakes reality; after all, the top executive’s pay is tied to company performance in a way that normally only plays out in theory. Even once Musk’s shares vest, he has to hold them an additional five years before selling them.

Viewed through the lens of recent history, the outlook is favourable. Musk’s new plan is similar to a previous one established in 2012, when Tesla was worth $3.2 billion. Though much more ambitious, the new plan’s underlying principle is the same: Musk was paid only when Tesla reached certain market value and operational benchmarks. It has reached all but one. His shares have vested, but he has not sold them. Further, he is not paid a salary. California law requires Tesla to pay at least a minimum wage, so the company sends him checks, but he doesn’t cash them.

Musk’s new compensation plan, announced January 23 and subject to shareholder approval, also requires him to continue to serve as CEO for the next 10 years. It does, however, include the option for him to become chief product officer and executive chairman, with a new chief executive reporting to him. According to Musk, this would happen only if Tesla becomes so large that it needs to recruit a top executive to oversee its operations.

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