The moonshot compensation packages awarded to executives like Tesla CEO Elon Musk, Axon CEO Rick Smith, and DoorDash CEO Tony Xu in recent years have followed a predictable script: They promise astronomical pay if the leader of a company hits audacious financial targets.
The idea behind moonshot pay is that conventional salaries and bonuses don’t motivate the kind of tectonic risk-taking and visionary leadership that turns good companies into generational ones. So boards offer executives the chance to get extraordinarily rich—but only if they deliver extraordinarily rare results.
