Wednesday, October 8, 2025

More CEOs demand ‘moonshot’ pay—billions in compensation for aggressive, seemingly impossible targets

In today’s CEO Daily: Amanda Gerut on CEO “moonshot” pay.
The big story: More worries that the AI bull run is too narrow.
The markets: U.S. futures are up but global equities are otherwise mixed.
Plus: All the news and watercooler chat from Fortune.

Good morning. If it seems like more CEOs are asking for—and getting—so-called “moonshot” pay packages, well, they are, as I reported in a recent feature for Fortune. A moonshot ties CEO compensation almost entirely to aggressive, seemingly impossible targets over five to 10 years. The upshot is often billions in compensation and slices of company ownership. But in the meantime, the CEO gets almost nothing.

Tesla CEO Elon Musk has hit two moonshots, but the second award, once valued at $56 billion, was twice rescinded after a legal challenge. Taser stun gun and body camera company Axon Enterprise awarded its CEO Rick Smith a carbon copy of Musk’s deal in 2018 at a smaller magnitude. Smith blew the lights out and last year earned compensation valued at $165 million after growing the company’s market cap from $2.5 billion to $13.5 billion. Smith even brought his entire workforce along with him by sharing some of his pay with employees, negotiating a deal where $88 million in stock went to the lowest-paid workers at Axon. His moonshot is also open to Axon workers, allowing them to put some of their pay at risk in a way similar to Smith’s comp. He’s now on a second seven-year moonshot plan, but even Smith’s wife was against the notion at first, because she thought it was just too risky.

Now, the trend is poised to spread beyond founder-CEOs like Smith to what Todd Sirras of executive compensation consulting firm Semler Brossy calls “founder-anointed successors.” For instance, Opendoor Technologies CEO Kaz Nejatian got a potential $2.8 billion moonshot and a slice of the company after he was hired last month. But Sirras’ concern is that big bets on a single CEO pose major risks to shareholders. Human beings are emotional and they get distracted easily thinking about what they can buy with all this stock, he said, like a new private jet.

He compared the potential rise of moonshot pay deals to the Jurassic Park film series. “Danger increases exponentially the closer these awards get to the general executive population,” Sirras said. While moonshots for founder-annointed successors and non-successors with a major capital investment he deems “inside the T-Rex fence”—“awards in non-founder companies means the dinosaurs have escaped and are heading to the mainland.” Read the full article here.—Amanda Gerut

Contact CEO Daily via Diane Brady at diane.brady@fortune.com

Top news

AI bull run is too narrow, Morgan Stanley exec says

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AI companies may be underinsured, legally

OpenAI and Anthropic may not be carrying enough insurance to pay all the legal claims against them from publishers whose work they have used to train their AI models, the FT reports. The companies may be required to use investor funds to pay off lawsuits. Kevin Kalinich, head of cyber risk at Aon, said “we don’t yet have enough capacity for [AI] providers”.

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Wall Street economist’s tariff predictions

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Elsewhere: Attorney General Pam Bondi refused to answer questions about her treatment of files held by the Justice Department that relate to President Trump and Jeffrey Epstein … The E.U. is considering new tariffs on steel imports by cutting the quota of steel that can be imported tariff-free and raising tariffs on the rest to 50% … Elon Musk’s Tesla launched two new, cheaper vehicles, priced at $40,000 for the Model Y and $37,000 for the Model 3.