Rethinking CEO Compensation

CEO compensation in public companies often lacks dependency on business performance, allowing for high pay without driving shareholder value. Elon Musk's compensation structure, where he received 10% of the company for 10Xing the stock, sets an example for other boards to consider when structuring compensation packages for CEOs. Traditional executive compensation practices rely on comparables and lack downside for CEOs, leading to an incrementally increasing compensation system. Musk's performance-based and high-risk compensation model with no guarantees should be a guiding light for all boards to rethink CEO compensation, a concept that shareholders generally support.