- Elon Musk took aim at Lucid Motors over its executive compensation in a X post on Monday.
- The Tesla CEO trumpeted performance-based pay after Lucid’s CEO received $379 million last year.
- Lucid’s Peter Rawlinson was rewarded for achieving market-value milestones, as Musk was in 2021.
Elon Musk jabbed at a rival electric-vehicle company on Monday, suggesting its boss is overpaid relative to its success.
“Beware any company where leadership compensation is not linked to performance,” the Tesla CEO posted on X. He was responding to a recent CEO compensation survey from Automotive News and Equilar, which found that Lucid Motors’ Peter Rawlinson was the highest-paid boss of a listed US automaker last year.
The Lucid chief received $379 million in total compensation, consisting of a $575,000 base salary, $373 million in stock awards, and $5.5 million of stock options. General Motors CEO Mary Barra received $34 million, or less than a tenth of Rawlinson’s figure, the survey showed.
Musk didn’t receive any stock awards or options last year, and declined to take a salary. However, the EV pioneer received over $23 billion of stock options in 2021 after Tesla blew past several market-capitalization and earnings milestones.
It’s worth emphasizing that like Musk, Rawlinson saw a big payout because his company surpassed market-cap milestones. Nearly 14 million of his 16 million restricted stock units vested in March last year after Lucid achieved four out of five market-cap targets, its latest proxy statement shows.
Lucid’s market value peaked above $90 billion in November 2021, but has nosedived by over 80% since then to below $15 billion today. The company’s revenue nearly doubled year-over-year to $300 million in the first half of this year, but its operating loss widened by almost 40% to $1.6 billion over the same period.
Musk is far from the only business leader to support performance-based pay for executives. Warren Buffett, the CEO of Berkshire Hathaway, expressed a similar view in his shareholder letter for 2006.
“We issue no lottery tickets that carry payoffs unrelated to business performance,” the investor said. “If a CEO bats .300, he gets paid for being a .300 hitter, even if circumstances outside of his control cause Berkshire to perform poorly.”
“And if he bats .150, he doesn’t get a payoff just because the successes of others have enabled Berkshire to prosper mightily,” Buffett added.