Why is Elon Musk increasing Tesla engineers' salaries? - Hindustan Times

Why is Elon Musk increasing Tesla engineers' salaries?

Apr 05, 2024 10:14 AM IST

Elon Musk says OpenAI's Sam Altman and Meta is trying to poach Tesla engineers aggressively.

Tesla Inc. (TSLA) is boosting compensation, as confirmed by CEO Elon Musk through a series of messages on his social media platform, X (formerly Twitter).

Elon Musk boosts Tesla's AI team compensation amidst talent war. REUTERS/Gonzalo Fuentes/File Photo/File Photo(REUTERS)
Elon Musk boosts Tesla's AI team compensation amidst talent war. REUTERS/Gonzalo Fuentes/File Photo/File Photo(REUTERS)

Musk’s announcement comes in amid the “craziest talent war” with competitors like OpenAI and Meta, which have successfully poached some of Tesla’s engineers with lucrative offers.

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“The talent war for AI is the craziest talent war I’ve ever seen!” Musk exclaimed. To counteract this, Tesla is implementing a new compensation structure for its AI team, which is contingent on achieving certain progress milestones. “Tesla is increasing comp (contingent on progress milestones) of our AI engineering team,” Musk stretched the reply.

The Tesla boss also said OpenAI has been “aggressively recruiting Tesla engineers with massive compensation offers” and “in few cases” they do succeed.

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AI recruitment war

This move was partly triggered by the departure of Ethan Knight, a machine learning scientist from Tesla’s Autopilot team, who joined Musk’s AI startup, xAI. “Ethan was going to join OpenAI, so it was either xAI or them,” Musk disclosed.

The SpaceX founder also pointed out that Tesla’s AI team, responsible for developing autonomous driving technologies, consists of over 200 engineers and is making rapid advancements. “Tesla’s pace of progress with autonomy is accelerating,” he noted.

Despite these efforts, Tesla’s base salaries have traditionally been lower than those offered by many Big Tech firms like Meta, Amazon, and Microsoft. Data from job sites such as Levels and Glassdoor indicate that Tesla’s Autopilot team offers entry-level engineers in the San Francisco Bay area salaries ranging from $160,000 to $170,000. This figure was lamented as “ridiculously low for the level of skill it requires” on Team Blind, a go-to under-the-radar social networking platform for tech workers.

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The AI boom has led tech companies to offer compensation packages worth millions annually, further intensifying the pressure on Tesla to remain competitive in attracting and retaining talent. According to Tesla’s 2023 proxy filing, the median total annual compensation for its employees was $34,084 in 2022, the latest year for which data is available. Musk himself has not taken a cash salary since 2020, but his stock options, valued in the billions, have attracted regulatory attention.

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