Case Study Abstract & Directions:

Tesla’s board of directors proposed an unusual compensation plan for the company’s CEO Elon Musk. The plan payouts were entirely contingent on achieving very ambitious market value, sales, and EBIT targets over the next ten years. If all the targets were achieved, Tesla would be one of the most valuable companies in the world, and Musk would receive the highest compensation of any CEO in U.S. corporate history. If the targets were not achieved, Musk would receive nothing. Proxy advisors (ISS and Glass Lewis) expressed serious reservations about the plan and urged shareholders to vote against it. Should shareholders approve or reject the plan?

Using the information provided in the case study, explain, in a 3 to 5 page paper, the problems addressed in the paper, and if you believe shareholders should approve or reject the plan.

Resource: (2018). Case Study: Tesla’s CEO Compensation Plan. Harvard Business Publishing.