As current and former Tesla workers face health risks and financial hardship during COVID-19, the electric car company just offered its CEO a massive payday. In May, Tesla posted its first annual profit in ten years as a public company (a pattern common amongst highly valued companies such as Uber and formerly WeWork). For Elon Musk, this achievement unlocked the first level of a generous compensation package that could altogether net him up to $55.8 billion in stock options should the company achieve a certain set of performance markers.
Musk’s pay scheme — officially called the CEO Performance Award — is structured in twelve levels. Each level is “unlocked” as the Tesla meets a series of operational milestones and stock market capitalization goals, referring to the combined value of all of Tesla’s shares of stock. The first level, which was achieved at the end of May, when Tesla sustained six months of a $100B valuation, granted the emerald-heir-turned-CEO stock options potentially worth approximately $700 million.
Meanwhile, furloughed Tesla manufacturing workers were told in May via emails retained by the Washington Post that their unemployment benefits may be suspended if they refused to return to the Fremont, California factory due to reopen. The majority of full-time workers among the factory’s ten thousand employees received sixty days of pay and benefits whereas some employees in part-time positions with full-time-equivalent hours received only two weeks’ pay. Those hesitant to violate local stay-at-home orders and resume work at risk of themselves and their families were informed by email that they would be on “unpaid leave.” Employees who did return faced pay cuts of ten percent that continued until the end of June.
Tesla is known within the automotive industry for its strikingly high employee turnover; in 2018, Musk told employees in a company-wide email that an upcoming layoff was a “hard decision [made] so that we never have to make this decision again”. Tesla laid off 2 percent of its total workforce in 2017, then another seven and nine percent, respectively, in 2018, and an additional nine and eight percent, respectively, of upwards of percent of its yet another nine percent of employees in 2019. For a frame of reference, first-round 2019 layoffs brought Tesla’s total headcount to approximately forty-four thousand workers, and the second round subtracted another three to four thousand positions.
Stock options and performance-based grants have been available to Tesla workers on all levels for over a decade through their Employee Purchase Plan, which offers Tesla common stock at a discounted purchase price through accumulated payroll deductions. But between the company-wide pay cuts and the frequent layoffs in the last four years, Tesla’s Purchase Plan does not compensate employees for their lost wages.
It is also worth noting that CEO Elon Musk publicly threatened via Twitter to remove stock options from its compensation packages if Tesla auto plant workers unionized in 2018. Other allegations of worker abuse in the last four years includes: racial discrimination, sexual harassment, unfair firings, union-busting, and threats of termination/ disciplinary action for use of paid sick days or maternity leave.
But Tesla is hardly exceptional; the American working class has been stripped of its bargaining power and purchasing power over the last two decades through outsourcing, union-busting, and a growing “gig economy” fueled by precarious labor. So long as Tesla shareholders continue to profit, Elon Musk has shown that he holds little value for his workers’ health and safety.
