Tesla cuts bonuses but raises starting salaries

With performance-based bonuses gone, many employees will receive reduced overall wages

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It is clear that Tesla’s direct sales model makes it possible for the Company to control and handle its employees’ compensation, in the sales and delivery departments, globally.

Although Tesla had closed down many stores and had been focussing on online sales, it had continued to pay delivery bonuses to its sales personnel on fulfilling certain targets. These bonuses were paid in cash as well as in stock options. Of late, however, it is reported that these bonuses have been done away with.

However, base salaries are likely to be hiked 12.5 per cent, which will in a way make up for the loss in terms of bonuses.

This move may prove beneficial for the sales personnel in the regions where electric vehicle (EV) sales are not that encouraging.

With demand for EVs surging, Tesla may not really need such bonuses and incentives to get its sales teams to sell more cars to achieve quarterly success. With these performance-based bonuses gone, the playing field becomes more equal and level for employees across Tesla.

Tesla recently made headlines for all the wrong reasons, when some of its Black employees alleged that they experienced racism at work. They were apparently denied promotions and assigned tasks that were a lot tougher than what was assigned to their White colleagues. Some Black women employees also said that they were denied performance reviews despite the extra effort and work they put in.

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