Tesla started off 2022 with a new 401(k) matching program, something which CEO Elon Musk been criticized for not offering to employees in the past.
According to a memo recently sent to employees, a copy of which was obtained by Drive Tesla, the automaker is implementing the program to help employees reach their retirement goals early by matching 50% of their 401(k) contributions.
“As part of our commitment to help you meet your retirement savings goals, beginning January 1, 2022, Tesla will be implementing a discretionary employee match. Tesla will match 50% of the first 6% (capped at $3,000 annually) of your eligible compensation that you contribute to your 401(k) plan.”
The memo goes on to suggest that employees should contribute 6% each pay period to maximize the employer match program.
Unlike some matching programs which can take several years for the contributions to vest, there is only a one year vesting period on Tesla’s program.
That means employees that have already achieved one year of service own the employer contributions immediately.
Not having a 401(k) matching program has been a favourite talking point among Tesla critics for years.
This is despite the fact that all employees receive Tesla (TSLA) shares as part of their compensation, an investment which has had far greater returns in recent years.
Elon Musk pointed this out to MSNBC anchor Stephanie Ruhle just under one year ago .
Everyone at Tesla receives stock.
My comp is all stock/options, which I do not take off the table.
That’s what you’re missing.
— Elon Musk (@elonmusk) February 9, 2021