New ICE Vehicles Banned in California by 2035

[Dadhawk]

Originally Posted by alex87f

Was the same last year. $379M including $372M stock.

Basically same answer though, and as you said, tied to company business so not really any real dollar value unless he immediately cashed it out.

[Irace86.2.0]

Originally Posted by alex87f

You're comparing Q3 builds with his yearly package .

Also, his 2021 package was 98.3% stock. So:
-it is absolutely linked to company performance despite what Musk says
-it is not cash and has no bearing on the loss per vehicle

Still, this is a huge package for a company that has few actual sales. 380x times the compensation of Rivian's CEO !

I think you are confused. The stock awards are currently valued at hundreds of thousands of dollars. This is like them giving him a hundred houses or a small island. The property values can go up if he develops them further, but they are already valued at a lot of money, so yes, the stocks can go up, and he is incentivized to develop the company to perform, but he also could just cash out his stock each year and pay himself from that stock award.

The company can sell their own stock instead of giving it to him, so they can use that investment revenue to balance their books, so to say, so it kind of is tied to the loses.

Also, compare Musk’s stock options/awards at the same point in time in Tesla’s development/sales volume. Big difference.

[alex87f]

I think we're saying the same thing. Yes he has a huge package compared to the company's performance and this is not a good signal (though I'd be surprised if Musk said something positive about one of his competitors).

But on the other hand, he is incentivized by being paid with stock and not the main reason Lucid is losing money. I'm also not sure he can sell such a huge amount of shares every year without upsetting the market somewhat. I'm not a trader but you'd have to compare what he has with how much value is being traded every day / week / month.

Likely the main issue is massive investment to bring their SUV to the market, combined with surprisingly dropping production numbers: https://insideevs.com/news/676539/lu...veries-2023q2/

[Dadhawk]

Beyond the corporate compensation, Lucid to me appears to have either a production, transport or sales problem as pointed in the InsideEVs article.

As a company they are not sustainable at their current level of sales. Tesla, even in its early days, had other financial resources besides car sales (SMOG credits sales, etc) and they ramped up volume on a reasonable scale to become profitable.

Lucid, as far as I can tell isn't doing any of that and is burning cash. 10,000 vehicles is nothing if it is your primary product line. Cadillac has produced @ least 13,047 LYRIQs in the 2024 model year and they are thought to be doing nothing. (That's the VIN on mine, built on 11/15)

[Irace86.2.0]

Originally Posted by Dadhawk

That's also the year Rivian went public so likely this is the result of his private shares gaining a monetary value.

Why are you mentioning Rivian? :dunno:

These are new shares, not old shares. They had a value at the time they were awarded of hundreds of millions of dollars. He could cash them out or continue to invest and develop the company.

[Irace86.2.0]

Originally Posted by Dadhawk

Basically same answer though, and as you said, tied to company business so not really any real dollar value unless he immediately cashed it out.

Again, not really. It has real dollar value like everything in life. They could have paid him in Bitcoin, property, loafs of bread, cash, etc. It all has value. If they gave him stock options and cash, and he bought hundreds of millions in stock then it would still be the same outcome that he owns those stocks and is now invested in the company, but the point is the company is young and still fairly modest in their scale, yet they are paying huge wages/packages to their CEO disproportionate to their profit.

[Irace86.2.0]

Originally Posted by alex87f

I think we're saying the same thing. Yes he has a huge package compared to the company's performance and this is not a good signal (though I'd be surprised if Musk said something positive about one of his competitors).

But on the other hand, he is incentivized by being paid with stock and not the main reason Lucid is losing money. I'm also not sure he can sell such a huge amount of shares every year without upsetting the market somewhat. I'm not a trader but you'd have to compare what he has with how much value is being traded every day / week / month.

Likely the main issue is massive investment to bring their SUV to the market, combined with surprisingly dropping production numbers: https://insideevs.com/news/676539/lu...veries-2023q2/

I'm going off this, and I am assuming their losses are tied to all expenses relative to revenue:

What is Stock Based Compensation?

Under US GAAP, stock based compensation (SBC) is recognized as a non-cash expense on the income statement. Specifically, SBC expense is an operating expense (just like wages) and is allocated to the relevant operating line items:

SBC issued to direct labor is allocated to cost of goods sold.
SBC to R&D engineers is included within R&D expenses.
SBC for management and those involved in selling and marketing is included in SG&A and other operating expenses.
Link

The EV makers’ net loss grew to $630.9 million in Q3. Lucid’s losses reached $2.17 billion through the first nine months of the year. Link





This graph starts with the Model S and not the Roadster, so that is what was sold from June of 2012 to December of 2012, which is like two quarters of 1300 cars, which is about what Lucid is doing now. More like one quarter of 900 and the second quarter of 1700, or something, but yeah, about what Lucid is doing now per quarter.

Compare that to what Musk received. Stock awards and stock options are two different things. Musk was given the right to buy 5.3 million shares of the company, which at $31 would be about $150 million, so he was investing his own money into the company, meaning if he cashed them out and ran then he would be right where he started, so he was incentivized to see the company grow. Read about his ability to cash them out too. The stocks didn't vest until later, and he needed to hit milestones. Completely different scenario.

Unless I am mistaken about Lucid's CEO's stock awards, he could cash out tomorrow, and he would be hundreds of millions of dollars, if not almost a billion dollars, richer. This doesn't mean he will, but if things get too hard, or if he just loses motivation, there is little skin off his back unless the stock rapidly tanks overnight, but in general, this is poor management, IMO. You don't give a CEO $500 million in stock/cash when the company is only bringing in $150 million in revenue per quarter, stock is crashing 90%, and net loses are in the billions.Link


Tesla’s Elon Musk paid $70,000 in 2013
https://www.cnbc.com/2014/04/25/tesl...0-in-2013.html

Tesla Motors
CEO Elon Musk was paid just under $70,000 in 2013. But he could be in line for much, much more.

According to a Tesla filing with regulators Thursday, Musk made a base salary of $33,280 in 2013. That was the minimum he was required to make under California law. He got an additional $36,709 in company bonuses.

Tesla says Musk, the billionaire founder of PayPal and rocket-building company SpaceEx, only accepts $1 and returns the rest to the company.

Tesla’s Elon Musk May Have Boldest Pay Plan in Corporate History
https://www.nytimes.com/2018/01/23/b...-musk-pay.html

The company is planning to announce on Tuesday Mr. Musk’s new compensation plan, and it is perhaps the most radical in corporate history: Mr. Musk will be paid only if he reaches a series of jaw-dropping milestones based on the company’s market value and operations. Otherwise, he will be paid nothing.

Tesla has set a dozen targets, each $50 billion more than the next, starting at $100 billion, then $150 billion, then $200 billion and so on, all the way to a market value of $650 billion. In addition, the company has set a dozen revenue and adjusted profit goals. Mr. Musk would receive 1.68 million shares, or about 1 percent of the company, only after he reaches milestones for both.

But to put these numbers in perspective, Tesla is worth only about $59 billion today.

[Lantanafrs2]

The price chart says the company is on its way out. It might need a bankruptcy to continue but institutions generally don't buy penny stocks, which is where this is heading. Btw I've learned this the hard way.

[Dadhawk]

@Irace86.2.0 yes, Musk accepted less in salary during those "lean" years. At that point Musk was already a billionaire so he could well afford to do that for what were, for him, passion projects. I respect him for putting his money where his passion is, but I'm not sure it's as magnanimous as you are seemingly making it out to be.

[Dadhawk]

Originally Posted by Irace86.2.0

Why are you mentioning Rivian? :dunno

Sorry meant Lucid June 21,2021. I was having a side conversation in my office at the same time with a guy thinking of purchasing a Rivian. Just more proof I can't multitask!

[Irace86.2.0]

Originally Posted by Dadhawk

@Irace86.2.0 yes, Musk accepted less in salary during those "lean" years. At that point Musk was already a billionaire so he could well afford to do that for what were, for him, passion projects. I respect him for putting his money where his passion is, but I'm not sure it's as magnanimous as you are seemingly making it out to be.

I mean, Lucid's CEO could afford to do the same too. He is a millionaire with a large salary.

Yes, at the point where Tesla was selling the volume Lucid is selling at Elon was a billionaire, but also had grown his wealth from the value of stocks tied to Tesla and SpaceX. It wasn't from wages and stock awards. For reference, in 2010 his share of Tesla stock was worth $219 million, of which, he had put in over $30 million of his own money at its founding. He also put $100 million of his $175 million payout when selling PayPal into starting SpaceX, so basically he invested almost all of his money into two companies, both of which were hemorrhaging money and struggling for years before becoming stable. While his wealth had grown, his wealth was directly tied to the performance of the companies, and his stock options, which gave him the right to buy more stock in Tesla, still weren't vested, so it wasn't like he could cash out and bail without taking a huge loss or walking away from millions if not billions in the process. Again, this is a stark contrast to what Lucid is doing to with their CEO.

I think Lucid is trying to follow in the footsteps of Tesla, and they may do fine, but there are a few things I see that make them different. For one thing, the payout to the CEO is disproportionately large and is not tied to the future value and growth of the company, even if it can be, and that is concerning. Two, the company seems to be trying to make the pinnacle of EV technology to best Tesla and Rivian and legacy manufactures, so they can make a name for themselves, but they seem to be doing so without making sure it is feasible. There is no reason to over-engineer parts by doubling the cost in order for something that is 5% better, but that seems to be their mantra: how can we make the best car, irregardless of whether the value for the cost translates for the customer. Tesla seems to be doing the opposite by making a compelling product where costs and value are maximized, but where it won't impede manufacturing speed, overhead, material acquisition, etc, so the car will be feasible and profitable.

Tesla was in the red for years. Amazon was in the red for years. It is fine to be in the red if that is from investing in the company, but apparently, Lucid is investing a lot into one man. The company is giving this guy around 10% of its liquidable assets in the form of stocks that could otherwise be used to grow the company or retain as assets in the event the company needs to liquidate those assets to stay afloat. Hopefully they are making the right decision. I'm also wondering what the future holds for this CEO's salary given the current pattern of awards.

Elon Musk is currently working for Tesla for free. That could change
https://www.cnn.com/2023/02/20/inves...pay/index.html

https://invezz.com/net-worth/elon-musk-net-worth/

[Dadhawk]

Originally Posted by Irace86.2.0

Elon Musk is currently working for Tesla for free. That could change

Well, not really. He is working for stock options and improving the value of those options, which he has exercised as described in the article...

He became one of the richest people on the planet through lucrative packages of stock options that gave him the right to buy hundreds of millions of shares of stock for a fraction of their market price, if the company hit various financial and market value targets.

The package of options he was granted in 2012 expired last year after he had received 9 of 10 blocks of potential options. And last month the company disclosed Musk received the last remaining block of options granted under an even more lucrative 2018 pay package.

I agree Lucid's Board is running an odd compensation package that makes no real sense in their situation, but hey, I can't blame a guy for taking it if it's offered.

[Irace86.2.0]

Seems like revenue and net income are mismatched for Lucid and doesn't justify such a huge payout for the CEO. Again, they should have given him stock options to invest his own money into the company than giving him stock awards, and those options should vest as the company grows.

[Lantanafrs2]

https://www.foxnews.com/politics/dem...ens-ev-mandate