Tesla 's Executive Compensation Policy

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Valjdrin Fejza Professor Gregory A. Carnes Accy 657 “Tesla’s Executive Compensation Policy”¬ Edward E. Lalwer, a major contributor to theory, research, and practice in the fields of human resources management, compensation, organizational development, and organizational effectiveness, states an effective compensation system will support an organization 's overall strategy as executive 's impact many areas. Executive compensation is a business expense that should be reasonable and competitive because money spent on compensation is not available for other corporate projects or firm projects. This paper will analyze the executive compensation policies for Tesla Motors, Inc. (“Tesla”) and will analyze: (1) How the policies meet the…show more content…
"Long-term" is generally considered to be five or more years for mature companies and three years for other companies (Tesla would most likely fall under "other companies.") CIIG section 5.1 further states an executive pay should be reasonable with respect to the company performance, industry considerations, risk considerations and compensation to other employees. As mentioned above, on August 1, 2012, Elon Musk was awarded options to buy nearly 5.3 million shares of Tesla stock at $31.17 each. CEO Grant provided in 2012 is over a ten years period and if any vesting tranches remain unvested after expiration they will be forfeited. The grant requires certain market capitalization and operational milestones. In 2013 and 2014, Mr. Musk did not receive any additional equity compensation except in respect of certain awards granted during 2013 pursuant to a patent incentive program that was available to employees generally. The Annual Proxy Statement for 2015 states the options provided to Elon Musk provided a motivation to promote corporate objectives and is structured to reward easily measured performance goals that closely align the executive officers’ incentives with the long-term interests of stockholders. CII 's Corporate Governance ("CIICG") section 5.2 advises all companies should provide annual advisory shareowner votes on compensation of senior executives. Section 5.4 requires shareowner approval of equity-based compensation plans

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