by Douglas Messier
Elon Musk has a new pay package with Tesla Motors that could net him $55 billion over the next decade if the company reaches a series of extremely ambitious targets, according to press reports. If he doesn’t reach those goals in 10 years, he could end up with nothing.
That might seem like a crazy plan even for Musk, who is known for taking great risks. But, it makes sense when you consider the billionaire’s ultimate long-term goal: to develop a transportation system to facilitate the establishment of human colonies on Mars.
Musk has said he is dedicating his personal wealth to that objective. And although his net worth is estimated at $21 billion, actual profits from his various businesses have been elusive.
Tesla Motors has lost billions of dollars, is deeply in debt, and has rarely shown a profitable quarter. It’s sky high stock price is predicated on future earnings. Tesla’s acquisition SolarCity was either a “no brainer” (Musk) that created synergies between the two companies, or a terrible acquisition (critics) of a money-losing company that did little more than bail out Musk and his two cousins, Lyndon and Peter Rive, while adding billions in debt to the car company.
SpaceX is a private company that does not release financial information. However, officials have said that the investment in developing reusable rockets totaled about $1 billion. That figure apparently does not include the company’s investment in the Falcon Heavy or a new launch complex in Texas. A report in The Wall Street Journal cited internal financial records showing SpaceX lost $260 million in 2015.
Meanwhile, Musk’s efforts to interest governments in his Mars plans as part of a public-private partnership have apparently come up short. Despite making two widely publicized presentations outlining his plans, the reaction from the world’s leading space powers has been a collective shrug.
The U.S. government under President Donald Trump is focusing NASA on returning astronauts to the moon. Every other major space agency seems focused on the moon as well. The only government that seems somewhat interested on Mars is the United Arab Emirates, but there’s no evidence thus far that it is willing to help fund Musk’s plan.
So, the Tesla compensation deal is likely a big throw of the dice, betting that he can meet the targets. With $55 billion he would be able to fully fund his Mars plan. In the meantime, he will continue to work on the big rocket he needs to get people there with whatever profits he has from his companies.