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Musk’s Multi-Billion-Dollar Tesla Comp Plan Is Shrewd Marketing Amid Rocky Patch

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Elon Musk

Everything about Elon Musk is larger than life these days, so it’s fitting that the new compensation package for Tesla’s visionary billionaire leader is equally audacious. It may also help should the company move to raise more funds this year to pay for Musk’s ever-expanding list of aspirations.

The package locks up Musk as either CEO or executive chairman and chief product officer for 10 years, with the sole compensation consisting of stock options that would be granted only if the company meets a series of performance goals. Among the most ambitious of them: Tesla’s market capitalization would have to ultimately swell to $650 billion, or about 11 times its current $59.4 billion level. Over the next decade, revenue from Tesla’s electric vehicles, batteries and solar panels has to reach an annual $175 billion, more than 10 times the likely level in 2017. There are no production volume goals, as was the case with his previous 2012 long-term compensation plan, though pre-tax earnings excluding certain items have to reach $14 billion to receive the maximum benefit.

Should all of that happen, Musk would be compensated with stock options equal to 1% of Tesla’s current outstanding shares, delivered over 12 tranches. It would expand his wealth by tens of billions of dollars, from Forbes’ estimate of $21 billion currently. The plan needs approval from Tesla shareholders, though given the faith so many of them place in Musk’s leadership, that seems likely to be a formality.

Certainly, if all the targets are met, it will be a remarkable accomplishment and worthy of remarkable compensation. A review of the package by The New York Times called it the “boldest pay plan in corporate history.” Not to be outdone, Musk himself told the paper: “I actually see the potential for Tesla to become a trillion-dollar company within a 10-year period.”

READ MORE: Roadblock: Elon Musk’s Net Worth Drops $800 Million In A Day

When Musk’s previous compensation plan was approved in 2012, the goals for the young company looked similarly audacious. At the time, it was not a foregone conclusion that the company that was just beginning to roll out its Model S sedan would be able to grow its market cap at the time from just over $3 billion by annual $4 billion increments. In fact, that happened even faster than anticipated, with its value swelling to nearly $60 billion. And of the targets Musk was to achieve in the original comp plan, including launching the Model X crossover and Model 3 sedan and aggregate production of 300,000 vehicles, at least nine of 10 have been met, according to the company.

So what’s the significance of this announcement right now, particularly given that Musk has given no indications that he’s considering stepping away from Tesla? Certainly, the news that he’s staying put, even in the event that he opts to relinquish CEO duties to a handpicked successor, will cheer his remarkably loyal owners and long-term investors. It also helps the company compete for talent, particularly as the role of technology companies in the area of next-generation transportation expands.

“The timing precedes what we expect to be an unprecedented era in the battle for capital and human talent,” Adam Jonas, an equity analyst for Morgan Stanley, said in a research note about the compensation plan.

“For much of Tesla’s history as a public company, the company has all but monopolized the OEM investment debate for Auto 2.0,” Jonas said. “Over the next 12 months, we anticipate that Tesla’s scarcity value amongst entities vying for supremacy in the new ecosystem will be challenged.”

READ MORE: Tesla Loses ‘Most Valuable US Carmaker’ Crown

And much like Musk’s over-the-top Tesla Semi and Roadster debuts late last year, turning attention to hopes for the future and away from current challenges – namely the struggle to achieve high-volume production of Tesla’s first (almost) mass-market car, the Model 3 – the sky-high performance goals keep the excitement for the brand very high. That’s important right now as soon-to-be-announced financial results for 2017’s fourth quarter, much like Tesla’s production results this month, may hold less to cheer about.

And if, as some analysts expect, Tesla issues new debt or stock for the ongoing expansion of its vehicle and manufacturing operations, development of new cars and trucks, an ever-larger global network of electric charging and vehicle maintenance facilities, it helps to have the brand’s symbol staying put.

Barclays equity analyst Brian Johnson estimated this month that Tesla will likely raise a further $2.5 billion this year, though probably not until the second half when, presumably, Model 3 production headaches are resolved or on their way to being solved.

Ultimately, the compensation package shows that eight years into its life as a public company that has become iconic, if not profitable, Tesla has no shortage of astonishing aspirations. And, of course, that the person who embodies, sets and guides those aspirations is sticking around for many years to come. – Written by 

Billionaires

Abducted Tanzanian Billionaire Mo Dewji Returns Home

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Tanzanian billionaire entrepreneur Mohammed Dewji, who was abducted by unidentified kidnappers on October 11 in Dar es Salaam, has been released and has returned home safe.

 

In a statement released by MeTL group at 3.15AM today, the prominent businessman says: “I thank Allah that I have returned home safely, I thank all my fellow Tanzanians and everyone around the world for their prayers. I thank the authorities of Tanzania, including the Police Force for working for my safe return.”

The Tanzanian police have also released a video in which Dewji, dressed in a t-shirt and who looks visibly shaken and worn out, thanks his supporters.

Said a source who works closely with Dewji to FORBES AFRICA: “He was released in the middle of Dar es Salaam around 3AM today, unharmed, after which he ran to the nearest security guards who dropped him off home. He does not know who his abductors were. He was only taken about 20 minutes away from the city center, so he has been in Dar es Salaam since the abduction. He has no visible bodily harm with the exception of marks from the handcuffs.”
She also revealed that the abductors wanted ransom but let him go on account of the media hype around the kidnapping.

Dewji was on his way to a gym session at a luxury hotel in Oyster Bay, Dar es Salaam, in the early hours of October 11, when he was kidnapped by the masked gunmen.

Dewji’s family had earlier offered 1 billion Tanzanian Shillings ($436,674) to anyone who could help them find him.
Dewji, popularly known as “Mo” in Tanzania, is the CEO of MeTL active in textile manufacturing, flour milling, beverages and edible oils in eastern, southern and central Africa. He is also the main sponsor of football club Simba.
Dewji was featured on the cover of FORBES AFRICA in July 2013 and was named FORBES AFRICA’s Person of The Year in 2016. The 43-year-old single-handedly turned his father’s trading business into Tanzania’s largest import-export group.

Dewji’s personal networth is $1.5 billion, according to the Africa billionaires list released by FORBES earlier this year. He is also Africa’s youngest billionaire.

Dewji’s office has said it will release a personal address by Dewji “once he is settled”.

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Zuckerberg And Bezos Fortunes Shed Billions Amid Tech Stock Slide

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Mark Zuckerberg Facebook billionaire

After a turbulent few days on the stock market, fueled by rising tension between China and the U.S. over trade agreements as well as hostile attention towards tech companies for its data-use standards, technology shares continued its decline on Tuesday. The tech-focused Nasdaq Composite dropped 2.9%.

The fortunes of two of the world’s biggest tech titans suffered big losses. Facebook’s Mark Zuckerberg closed Tuesday $3.1 billion poorer while Amazon’s Jeff Bezos, the richest man on Earth, ended the day down $4.6 billion, at $124.1 billion.

Since March 17, when news first broke about the scandal involving Cambridge Analytica’s improper use of data gathered via Facebook, Zuckerberg’s fortune has fallen by nearly $13 billion. Forbes pegs his net worth at the close of markets Tuesday at $61.3 billion. He’s ranked seventh richest in the world, down from fifth richest as of mid-February.

READ MORE: After Latest PR Nightmare, Mark Zuckerberg’s Net Worth Drops $5.1 Billion In Hours

Zuckerberg took out full-page ads in several British and American newspapers on Sunday to apologize for the social media giant’s role in Cambridge Analytica data incident. “This was a breach of trust, and I’m sorry we didn’t do more at the time,” the ad reads. “We’re now taking steps to ensure this doesn’t happen again.”

Amazon’s stock, meanwhile, fell alongside other tech stocks on Tuesday. After closing Monday in the green, Amazon stock dropped 3.7% on Tuesday. Bezos, who founded the e-commerce giant from a Seattle garage in 1994, owns 16% of the company’s stock.

READ MORE: Forbes Billionaires 2018: Meet The Richest People On The Planet

Bezos overtook Microsoft co-founder Bill Gates as the richest man on Earth in October 2017. He is also the only centi-billionaire on the Forbes billionaire rankings. – 

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Billionaires

After Latest PR Nightmare, Mark Zuckerberg’s Net Worth Drops $5.1 Billion In Hours

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After another public relations debacle for Facebook—in which a Trump-affiliated data firm was accused of improperly gleaning information on more than 50 million users—the company’s stock plummeted nearly 7%, through 1pm Eastern Time on Monday, erasing $37 billion of market value. The decline had the biggest impact on Mark Zuckerberg, Facebook’s cofounder and CEO, whose net worth fell $5.1 billion.

Zuckerberg, who owns about 16% of Facebook’s shares, is now worth an estimated $69.5 billion, according to Forbes’ real-time rankings of the world’s billionaires. He is currently the seventh-richest person on the planet, down from fifth, after falling behind Zara cofounder Amancio Ortega and Carlos Slim Helu, Mexico’s richest person.

READ MORE: Forbes Billionaires 2018: Meet The Richest People On The Planet

It’s the latest in a string of bad news for Facebook. Last year it was blamed for, among other things, facilitating misinformation, contributing to polarization in Britain, Austria, Italy and elsewhere and enabling foreign political interference. Already, 2018 has been no less turbulent.

On March 17, news broke that data firm Cambridge Analytica—which worked as a consultant for Donald Trump’s presidential campaign—allegedly ”harvested private information from the Facebook profiles of more than 50 million users without their permission.” The report, published in the New York Times, has exacerbated concerns that the social media giant can be exploited for partisan gain. On Sunday, March 18, lawmakers in both the United States and United Kingdom pressed Facebook for more details on the matter.

In the Times report, Facebook’s deputy general counsel, Paul Grewal, called the incident “a scam — and a fraud.” “We will take whatever steps are required to see that the data in question is deleted once and for all — and take action against all offending parties,” he added. Cambridge Analytica was suspended from the platform soon after.

The data consultancy has been in the headlines since Trump’s victory in November 2016. The firm had targeted voters and helped tailor political messaging for his campaign. Amid the post-election upheaval Cambridge Analytica’s CEO, Alexander Nix, told Forbes in December 2017 that the company would de-emphasize its political work in the U.S. He further stated that the business had “no involvement with Russians,” an assertion that was also disputed in the Times this week.

READ MORE: Facebook Says Fake Accounts Likely Tied To Russia Bought $100,000 In Political Ads

Zuckerberg, 33, founded Facebook in 2004 as a 19-year-old student at Harvard. He dropped out during his sophomore year to focus full-time on the company, which quickly expanded past its initial niche on college campuses. Today Facebook boasts more than 2 billion monthly active users.

The business’ revenue has swelled in turn, to $40.7 billion in 2017. Together with Google, Facebook accounts for over 60% of online advertising dollars, according to Statista. As the firm’s financial and social power continues to intensify, some have called for regulatory intervention. This week’s tumult will do nothing to ease that pressure. – 

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