A new type of CEO pay is redefining “high risk, high reward.” From Tesla to Axon to Opendoor, corporate boards are increasingly betting billions on so-called “moonshot” pay packages — truly massive compensation deals tied not to annual profits, but to 5- to 10-year milestones.
At the center of this trend is Elon Musk, whose latest 10-year compensation plan could eventually net him up to $878 billion in Tesla stock. That’s billion, with a B. It’s not a typo — just to be clear, since the numbers do defy logic.
But here’s the twist: a Reuters investigation found Musk may be able to earn tens of billions without ever delivering on his loftiest promises. Just hitting a few early, easier goals — like moderate growth in sales and valuation — could trigger a $26 billion payout.
How CEOs Are Cashing In on Long-Term Hype
Elon Musk isn’t the only one with stars in his eyes and billions at stake.
Back in 2018, Rick Smith, CEO of Axon Enterprise (maker of Taser stun guns and police body cameras), took on his own moonshot: grow Axon’s market cap 10x in 10 years, starting from $2.5 billion. His salary? Just $31,000 a year, and no bonus unless he hit the goals.
He crushed them in five years, earning $165 million in 2023 alone. Unlike most CEOs, though, Smith turned around and shared $88 million worth of stock with Axon’s lowest-paid employees.
He even created a version of his moonshot plan for the whole workforce, letting them risk some of their pay in return for long-term equity rewards.
But While CEOs Get Rich, Regular People Fall Further Behind
This isn’t a common story, unfortunately. These billion-dollar bets are taking off at a time when inflation is punishing average families. Rents are up. Grocery prices remain stubbornly high. Gas, child care, insurance — it all costs more. For many Americans, the paycheck doesn’t stretch like it used to.
Yet CEOs like Musk, Smith, and Opendoor’s Kaz Nejatian, who recently secured a $2.8 billion moonshot, are cashing in on increasingly grand pay schemes. And they’re doing it with board approval, even as their companies often underperform or cut costs elsewhere.
CEOs are being promised billions for targets a decade away, while everyday employees can’t afford to live near the offices they keep running.
Investor Backlash Is Brewing
Critics argue that moonshots skew executive incentives, encouraging short-term hype over long-term fundamentals. Some deals, like Musk’s, include vague, loosely defined goals around autonomy and AI, allowing CEOs to declare victory even when the tech isn’t market-ready.
Not all shareholders are on board. At business payments company Corpay, CEO Ronald Clarke received a $55 million stock award — but only after the board lowered the performance bar to help him qualify. Investors pushed back: the company’s say-on-pay vote barely passed with 53.5% support. That’s far below the 91% average across public companies.
And this is the paradox: even as boards sell these plans as “pay for performance,” some companies are tweaking the rules mid-game.
Are We Creating Celebrity CEOs or Real Leaders?
The logic behind moonshot pay is seductive: incentivize greatness, reward only results. But critics say these packages are more about optics than outcomes. In Musk’s case, Tesla’s board claims he’s irreplaceable and essential to not just Tesla, but to humanity’s AI-powered future.
But as governance experts point out, that narrative puts too much power in one person’s hands. And in the meantime, average workers are left wondering why their cost-of-living raises are measured in cents, while their CEOs walk away with nine-figure payouts for hypothetical futures.
The Verdict: Moonshot or Misfire?
As moonshots move from visionary exceptions to mainstream practice, the tension is mounting. On one hand, they could drive extraordinary innovation. On the other, they may simply inflate executive wealth at a time of historic economic pressure on working people.
