Tesla CEO Wrong About Model S Timeline? $1,000,000 Says Yes

thecarchik writes with the snarky-sounding claim that Elon Musk, CEO of electric-car startup Tesla Motors, sometimes says "things that later prove not to be quite true." thecarchik continues: In that, he's like many entrepreneurs, who spend a portion of their time persuading the unconvinced and painting pictures of the rosy future, despite inconvenient facts that may contradict that vision of the future. And in the case of the 2012 Tesla Model S all-electric sports sedan, which Tesla says it will launch before the end of next year, skeptics abound. Pulitzer Prize wining Journalist Dan Neil said the schedule promised by Musk was 'an audacious timeline that makes many in the car industry roll their eyes.' And, he added, 'Even people inside Tesla are leery.' The implication was clear: Neil didn't believe Tesla would be able to deliver on Musk's promises. A week later, Musk e-mailed Neil and told him in no uncertain terms that he was wrong. After several lively rounds of e-mail, he challenged Musk to a $1 million bet on the outcome based on the Tesla Model S hitting 4 targets. If the Tesla Model S misses any of the targets, Neil wins the bet." I'd like to see many more media statements backed by explicit wagers, and not just the indirect gamble of the stock market.

How it should work

[hairyfish]

The system now is broken. Today's CEO get paid multi-million dollar bonuses win, lose or draw. Someone has to lose, and right now that is the rest of us. Every CEO should be given an agreed goal, and their bonus works both ways. If they achieve it they win their bonus, if they lose they pay out. How much more effective would executives be under this system? It would certainly weed about the bullshit-artists and big talkers.

Re:How it should work

[GodfatherofSoul]

The problem is that culturally we look at CEOs as corporate superstars and not just employees. The attitude is that the company is an extension of the CEO which is probably only true in rare cases (like Jobs). So, the storyline becomes "we have to pay for talent" and not just another cog in the corporate wheel (upper management). I'm sorry, but running a corporation doesn't take billion-dollar bonus talent.

Interestingly, we used to have our tax code structured (via extremely high top-end tax rates) to prevent this precise thing from happening. It used to be 90%! Law makers were pragmatic enough to know that in the absence of some regulatory brake (disincentive by reduced net wages for CEOs), upper management would eventually get smart enough to bleed their respective companies dry. Of memory, I think it was Dick Grasso who was the CEO of NASDAQ years ago. The company made $800 million one year and he got a $200 million bonus!

Now that's the CEO. Don't forget about all the VPs underneath them and what they're getting as well.