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With the annual performance reports issued by automobile enterprises one after another, the annual profits of automobile enterprises will also be disclosed, and the year-end awards of employees will also be issued. Tesla achieved a delivery record of more than 500,000 vehicles last year, which means that employees will also receive a lot of bonuses. Even if the company makes so much money, Tesla is rumored to be reluctant to buy pension funds for employees.

In response to this question, foreign media asked Tesla CEO Elon Musk on social platforms: "Tesla can pay Elon Musk billions of dollars in compensation, why not give employees 401k pension benefits?"

Musk tweeted: "Everyone at Tesla gets stock, even my own compensation comes from stock and options, but I don't use them." You wouldn't understand."

Unlike most other automakers, Tesla offers stock options and rewards to all employees as part of its compensation package, which Tesla incentivizes employees for, Musk has said,"Our compensation philosophy for all employees reflects our entrepreneurial philosophy, emphasizing equity-based work rewards." That's why Tesla doesn't contribute to 401K plans for employees in the form of cash or company stock.

The company is known to offer stock options to all employees, not just management. Even through non-cash payments, Tesla's stock-based compensation reduced the company's profits by $1.7 billion last year, but the company didn't specify how much was given to 70750 employees or Musk's stock.

For these stocks, Musk said that even though some executives usually exercise them when they expire or release cash, they have never sold and realized them. While executives don't have a stock market value comparable to Musk's astronomical figures, they can easily achieve financial freedom and make many employees very rich.

While most new employees receive $20,000 to $40,000 in restricted stock after a year at Tesla, they need three years to exercise those shares. Even employees who leave Tesla directly can get stock compensation.

Musk's Twitter response to this pay method has been praised and commented on by many netizens, but it is also because Tesla's share price has soared in recent years that most of the criticism has been quelled. Earlier media reports said Tesla's stock, which at one point exceeded $1000, rose 743% in 2020, making Musk the biggest winner in 2020 and making Tesla one of the world's most valuable companies.

However, Tesla's success has nothing to do with the equity incentive system. As long as the company is good, the model of more natural income for employees does motivate employees to work hard. It is reported that Musk has revealed that in May 2020, when the company obtained the first option, the value has climbed to $6.2 billion, while the option valuation at that time was only $770 million, which can be profitable. In any case, if Tesla's stock price continues to climb in the future, the value of Musk's and Tesla's employee options will also rise.

Of course, Tesla's share price climb is also inseparable from the increase in delivery volume. According to Tesla's total annual sales data for 2020, sales were 499,550 units, only 450 units short of the sales target of 500,000 units, and production reached 509,737 units. Tesla CEO Musk is obviously satisfied with this result, because it reflects Tesla's completion of a milestone revolution. It is worth mentioning whether Tesla options can be obtained for employees in the rising sales market in China?

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