There has been no shortage of headlines and clickbait opinions from so-called “experts” about Tesla’s proposed compensation package for its once-in-a-generation CEO Elon Musk, yet most of them have thus far missed the point.

It’s easy to pass judgment from the metaphorical corporate governance ivory tower, but I was in the room as a governance advisor to the Tesla Board’s Special Committee and have a direct understanding of the thoughtful strategy behind this performance award. This plan was developed through a best-in-class corporate governance process. How do I know that? I have over 30 years of experience in corporate governance, M&A, and board leadership as an advisor, practitioner, educator, and expert witness — I’ve seen these processes play out countless times and know what effective and thoughtful board oversight looks like. Let me tell you why this is the right plan for Tesla and its shareholders. 

This plan wouldn’t pay Elon based on promises — it is 100% contingent on a framework that requires achievement of market capitalization and operational milestones in support of his vision and ties his incentives directly to meeting those milestones. When you consider the details of the plan, it’s clear that creating extraordinary value for shareholders is the absolute priority.  

While this compensation plan may be atypical and not what shareholders and governance experts are used to, it is a true corporate governance masterclass by the Tesla Board’s Special Committee. This is a real-world governance approach focused entirely on how to maximize long-term results for shareholders, the owners of Tesla. In an era when executive compensation philosophy is often criticized for rewarding mediocre performance or short-term thinking at the expense of long-term strategy, Tesla’s approach stands out for its rigor and emphasis on accountability. Elon wins ONLY if Tesla shareholders win, and win big. 

Why now — retaining a visionary when it matters most 

As Tesla’s focus shifts towards AI, robotics and sustainable energy products, the company is at an inflection point. The Board’s view is clear: Elon has a singular vision to lead Tesla forward, and retaining and motivating him is critical for the company’s future success. The Board recognized that standing still amidst Tesla’s evolution would be reckless and thus acted in the company’s best interest by taking swift action to secure Elon’s leadership when it mattered most. 

The business risk of losing the leader who continues to drive Tesla’s innovation and attract the talent required to stand out in a crowded landscape is clear. The competition for top engineering and AI talent is getting hotter by the minute, and much of Tesla’s appeal as an employer and innovator is directly tied to Elon. The Board’s view is that Elon’s one-of-a-kind leadership is key not only to Tesla’s next phase of growth, but also to securing deep layers of impressive talent that are necessary to accomplish Tesla’s goals. The cost of losing that leadership would be far higher than the cost of a well-structured, performance-only award that is 100% aligned with shareholders. 

Gold standard special committee process 

Take it from a professor and former investment banker — the creation of this plan was not an academic exercise in corporate governance. A disinterested Special Committee conducted a seven-month process, retained its own legal, compensation, valuation, accounting, and governance advisors, negotiated directly with Elon and deliberated extensively among themselves with the full Tesla Board (excluding Elon and Kimbal Musk). The full report has been publicly filed to permit shareholders to scrutinize the process and the conclusions. The Board could not have been more transparent. 

No results, no reward

While headlines are focusing on the numbers, this plan focuses on real results for Tesla and its shareholders — sustained market capitalization milestones, staggering adjusted EBITDA hurdles, real-world product deployment and Elon remaining in a leadership role at the company and developing the next generation of leaders — for Elon to get paid and receive any additional voting influence over Tesla’s strategic direction. This means his incentives are not just tied to hitting highly ambitious targets, but also to ensuring those results are sustained over the long haul. At the same time, the plan prudently addresses retention of Tesla’s visionary leader through vesting periods of up to 10 years after the grant date.  

Voting power is the primary motivating factor for Elon. He has spoken publicly about a desire for greater influence over the direction of Tesla’s AI deployment. This plan provides an opportunity for enhanced ownership, but not so much that Elon can’t still be overturned by his fellow shareholders.  

The operational and financial milestones create clear alignment between shareholder value creation and Elon’s compensation. If Elon doesn’t deliver results, he gets nothing. If he falls short of a market capitalization milestone, there is no consolation prize. Essentially, the Special Committee and the Board have developed a construct in which Elon does not receive the full compensation or get to keep the associated voting rights under the award until he successfully oversees the creation of what could be the most valuable company in the world — and remains in a leadership role for the applicable vesting period. 

Shareholders’ high-stakes decision 

Responsible, shareholder-first governance ties leadership’s upside to sustained shareholder value, through a transparent and disinterested process. That’s exactly what Tesla has delivered.

Now, it’s up to shareholders to have the final say.

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.