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1. Set valuation target with incentive payout for Musk 2. Tesla meets valuation target, benefiting shareholders 3. Shareholders complain that the incentive payo
by totalZero 6y ago
1. Set valuation target with incentive payout for Musk
2. Tesla meets valuation target, benefiting shareholders
3. Shareholders complain that the incentive payout is too high
I don't like Elon Musk at all, but this is really bizarre logic.
- xkjkls 6y agoIt is insane to set market cap goals instead of share price goals. The market cap of Tesla can go up without ever benefitting shareholders.
- totalZero 6y agoMarket cap goals and share price goals are the same thing. Share price is simply market cap divided by the number of shares outstanding.
- xkjkls 6y agoYes, but in the case of issuance of new shares they aren’t. Stock based compensation adds to the market cap but not to the stock price. Same with acquisitions done in stock. You could merge your company with another company the same value and double the market cap without the share price changing.