Preliminary proxy materials (as filed with the Securities and Exchange Commission on Schedule 14A) may be informative for investors, but they are rarely as jaw-dropping as Tesla’s proposed compensation package for founder and CEO Elon Musk.

The 10-year deal, filed on Jan. 23, is a that ties Musk’s compensation to, “market capitalization and operational milestones that are based on Tesla becoming one of the most valuable companies in the world.”

To fully vest, Tesla's market cap would need to grow to $650 billion (an increase of almost $600 billion). Other revenue and profitability goals would also need to be achieved.

The award, according to the company, is modeled after Musk's 2012 performance award, “which helped bring about a more than 17-fold increase in Tesla's market cap in the five years after it was put in place”

Under the terms of the deal, Musk will receive no guaranteed compensation of any kind—no salary, no cash bonuses, and no equity that vests solely by the passage of time. Instead, his only compensation will be a 100 percent at-risk performance award.

The details

The performance award consists of a 10-year grant of stock options that vests in 12 tranches. Each of the tranches vests only if a pair of milestones are both met.

Market Cap Milestones: To meet the first market cap milestone, Tesla's current market cap must increase to $100 billion. For each of the remaining 11 milestones, Tesla's market cap must continue to increase in additional $50 billion increments.

Operational Milestones: To meet the operational milestones, Tesla must meet a set of escalating Revenue and Adjusted EBITDA targets (the only adjustment to EBITDA is for stock-based compensation). These milestones are even more directly aligned with shareholder value creation than those used in Musk’s 2012 performance award. They are designed to ensure that as Tesla's market cap grows, the company is also executing well on both a top-line and bottom-line basis.

For each of the 12 tranches that is achieved, Musk will vest in stock options that correspond to 1 percent of Tesla's current total outstanding shares (1 percent of that amount is approximately 1.69 million shares). If none of the 12 tranches is achieved, he will not receive any compensation.

For vesting to occur when the milestones are met, Musk must remain as Tesla's CEO or serve as both executive chairman and chief product officer, in each case with all leadership ultimately reporting to him.

“This ensures that Elon will continue to lead Tesla's management over the long-term while also providing the flexibility to bring in another CEO who would report to him at some point in the future,” the announcement says.

The proposed performance award was created by Tesla's Board of Directors after more than six months of discussion and analysis and in consultation with Compensia, a third-party compensation consultant. Its effectiveness is subject to the approval of Tesla's shareholders, who will be asked to approve it at a special shareholder meeting that will be held in late March.

Anyone who is a shareholder of record or beneficial owner of Tesla shares as of the record date (currently projected to be Feb. 7, 2018) will be entitled to vote their shares at the special meeting and the award will only become effective if a majority of the votes cast are in favor of the plan.