Teslaled by Elon Musk, has opted for a particular salary strategy: low base salaries combined with generous stock packages. Although risky, this system seeks to attract employees committed to the company for the long term.
According to an investigation by ‘Business Insider’, Tesla maintains base salaries below the industry average, although it offers attractive stock grants to compensate. This is a risk compensation model in which employees in key areas such as engineering and manufacturing They receive salaries between 35,000 and 324,000 dollarsfigures that are conditioned to the fluctuation of the company’s shares.
That said, Tesla is known to offer up to three types of stock options such as restricted stock units (RSUs), non-qualified stock options and incentive stock options (ISOs). The former are aimed mainly at the majority of employees, while the latter at senior executives and employees with long experience in the company.
A commitment of “extreme dedication”
In 2020 and 2021, Around 44 employees in the United States received share packages worth more than $1 million. However, this stock compensation is not immediate; employees must wait for these to vest, which depends on the volatility of Tesla’s share price. Despite this, some employees managed to become millionaires thanks to their actions, which acts as an incentive to stay with the company.
Musk has created a culture at Tesla that privileges “extreme dedication,” where employees are selected not only for their skills, but also for their willingness to work intensely for the company’s vision. According to former employees, consistent with Business Insider’s research, the pressure of waiting for stocks to mature can feel like “golden handcuffs,” making the work experience demanding.
With Tesla’s stock volatility high, current employees question whether this model will continue to be as effective for new hires. According to the report, if the stock price were to fall drastically, Tesla could find itself needing to reconsider its compensation model, which would call into question its attractiveness to new talent.